Unity Software Inc. (U) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, U broke through the 20-day moving average, which suggests 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.
U could be on the verge of another rally after moving 22.1% higher over the last four weeks. Plus, the company is currently a Zacks Rank #2 (Buy) stock.
The bullish case solidifies once investors consider U's positive earnings estimate revisions. No estimate has gone lower in the past two months for the current fiscal year, compared to 1 higher, while the consensus estimate has increased too.
Investors should think about putting U on their watchlist given the ultra-important technical indicator and positive move in earnings estimate revisions.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
