Shoals Technologies Group (SHLS) Just Overtook the 20-Day Moving Average

From a technical perspective, Shoals Technologies Group (SHLS) is looking like an interesting pick, as it just reached a key level of support. SHLS recently overtook the 20-day moving average, and this suggests 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.

Similar to other SMAs, if a stock's price moves above the 20-day, the trend is considered positive, while price falling below the moving average can signal a downward trend.

SHLS has rallied 7.1% over the past four weeks, and the company is a Zacks Rank #2 (Buy) at the moment. This combination suggests SHLS could be on the verge of another move higher.

The bullish case only gets stronger once investors take into account SHLS's positive earnings estimate revisions. There have been 5 revisions higher for the current fiscal year compared to none lower, and the consensus estimate has moved up as well.

Investors may want to watch SHLS for more gains in the near future given the company's key technical level and positive earnings estimate revisions.

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

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