KB Home (KBH) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, KBH crossed above 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.
KBH has rallied 8.1% over the past four weeks, and the company is a Zacks Rank #1 (Strong Buy) at the moment. This combination suggests KBH could be on the verge of another move higher.
Once investors consider KBH's positive earnings estimate revisions, the bullish case only solidifies. No earnings estimate has been lowered in the past two months, compared to 5 raised estimates, for the current fiscal year, and the consensus estimate has increased as well.
Investors should think about putting KBH on their watchlist given the ultra-important technical indicator and positive move in earnings estimate revisions.
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