After reaching an important support level, Powell Industries (POWL) could be a good stock pick from a technical perspective. POWL surpassed resistance at the 20-day moving average, suggesting a short-term bullish trend.
The 20-day simple moving average is a popular investing tool. Traders like this SMA because it offers a look back at a stock's price over a shorter period and helps smooth out price fluctuations. The 20-day can also show 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.
POWL could be on the verge of another rally after moving 5.9% higher over the last four weeks. Plus, the company is currently a Zacks Rank #2 (Buy) stock.
Once investors consider POWL's positive earnings estimate revisions, the bullish case only solidifies. No earnings estimate has been lowered in the past two months, compared to 3 raised estimates, for the current fiscal year, and the consensus estimate has increased as well.
With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on POWL for more gains in the near future.
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