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Pinduoduo Inc. Sponsored ADR (PDD) Crossed Above the 20-Day Moving Average: What That Means for Investors

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After reaching an important support level, Pinduoduo Inc. Sponsored ADR (PDD) could be a good stock pick from a technical perspective. PDD surpassed resistance at the 20-day moving average, suggesting a short-term bullish trend.

The 20-day simple moving average is a popular trading tool. It provides a look back at a stock's price over a 20-day period, and is beneficial to short-term traders since it smooths out price fluctuations and provides more trend reversal signals than longer-term moving averages.

Like other SMAs, if a stock's price is moving above the 20-day, the trend is considered positive. When the price falls below the moving average, it can signal a downward trend.

Moving Average Chart for PDD
Moving Average Chart for PDD

PDD has rallied 30.3% over the past four weeks, and the company is a Zacks Rank #2 (Buy) at the moment. This combination suggests PDD could be on the verge of another move higher.

Looking at PDD's earnings estimate revisions, investors will be even more convinced of the bullish uptrend. There have been 2 revisions higher for the current fiscal year compared to none lower, and the consensus estimate has moved up as well.

With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on PDD for more gains in the near future.


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