After reaching an important support level, Celestica (CLS) could be a good stock pick from a technical perspective. CLS surpassed resistance at the 20-day moving average, suggesting 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.
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.
CLS has rallied 13.3% over the past four weeks, and the company is a Zacks Rank #1 (Strong Buy) at the moment. This combination suggests CLS could be on the verge of another move higher.
Once investors consider CLS'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 CLS for more gains in the near future.
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