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Ellington Credit (EARN) Recently Broke Out Above the 20-Day Moving Average
After reaching an important support level, Ellington Credit (EARN - Free Report) could be a good stock pick from a technical perspective. EARN 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.
Similar to other SMAs, if a stock's price moves above the 20-day, the trend is considered positive, while price falling below the moving average can signal a downward trend.
EARN could be on the verge of another rally after moving 7.7% higher over the last four weeks. Plus, the company is currently a Zacks Rank #1 (Strong Buy) stock.
Once investors consider EARN'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 EARN for more gains in the near future.