IBM (IBM) Recently Broke Out Above the 20-Day Moving Average

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

A well-liked tool among traders, the 20-day simple moving average offers a look back at a stock's price over a 20-day period. This is very beneficial to short-term traders, as it smooths out short-term price trends and gives more trend reversal signals than longer-term moving averages.

The 20-day moving average can show signals that are similar to other SMAs as well. 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.

Shares of IBM have been moving higher over the past four weeks, up 8.4%. Plus, the company is currently a Zacks Rank #2 (Buy) stock, suggesting that IBM could be poised for a continued surge.

The bullish case only gets stronger once investors take into account IBM's positive earnings estimate revisions. There have been 1 revisions higher for the current fiscal year compared to none lower, and the consensus estimate has moved up as well.

Given this move in earnings estimate revisions and the positive technical factor, investors may want to keep their eye on IBM 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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