Affirm Holdings (AFRM) Just Overtook the 20-Day Moving Average

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

The 20-day simple moving average is a popular investing tool. Traders like this SMA because it offers a look back at a stock's price over a shorter period and helps smooth out price fluctuations. The 20-day can also show 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.

AFRM has rallied 5% over the past four weeks, and the company is a Zacks Rank #3 (Hold) at the moment. This combination suggests AFRM could be on the verge of another move higher.

Once investors consider AFRM's positive earnings estimate revisions, the bullish case only solidifies. No earnings estimate has been lowered in the past two months, compared to 1 raised estimates, for the current fiscal year, and the consensus estimate has increased as well.

Given this move in earnings estimate revisions and the positive technical factor, investors may want to keep their eye on AFRM for more gains in the near future.

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This article originally published on Zacks Investment Research (zacks.com).

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