Lamb Weston (LW) Crossed Above the 20-Day Moving Average: What That Means for Investors

After reaching an important support level, Lamb Weston (LW) could be a good stock pick from a technical perspective. LW 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 LW have been moving higher over the past four weeks, up 7.7%. Plus, the company is currently a Zacks Rank #3 (Hold) stock, suggesting that LW could be poised for a continued surge.

The bullish case only gets stronger once investors take into account LW's positive earnings estimate revisions. There have been 3 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 LW 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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