Lemonade (LMND) Just Overtook the 20-Day Moving Average

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

The 20-day simple moving average is a well-liked trading tool because it provides a look back at a stock's price over a 20-day period. Additionally, short-term traders find this SMA very beneficial, as it smooths out short-term price trends and shows 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.

LMND has rallied 18% over the past four weeks, and the company is a Zacks Rank #3 (Hold) at the moment. This combination suggests LMND could be on the verge of another move higher.

Once investors consider LMND's positive earnings estimate revisions, the bullish case only solidifies. No earnings estimate has been lowered in the past two months, compared to 6 raised estimates, for the current fiscal year, and the consensus estimate has increased as well.

With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on LMND 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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