After reaching an important support level, Cisco Systems (CSCO) could be a good stock pick from a technical perspective. CSCO 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.
CSCO could be on the verge of another rally after moving 5.5% higher over the last four weeks. Plus, the company is currently a Zacks Rank #2 (Buy) stock.
The bullish case only gets stronger once investors take into account CSCO's positive earnings estimate revisions. There have been 9 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 CSCO for more gains in the near future.
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Cisco Systems, Inc. (CSCO): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).