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Chewy (CHWY) Just Reclaimed the 20-Day Moving Average
Chewy (CHWY - Free Report) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, CHWY broke through the 20-day moving average, which suggests 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.
Shares of CHWY have been moving higher over the past four weeks, up 7%. Plus, the company is currently a Zacks Rank #2 (Buy) stock, suggesting that CHWY could be poised for a continued surge.
The bullish case only gets stronger once investors take into account CHWY's positive earnings estimate revisions. There have been 8 revisions higher for the current fiscal year compared to none lower, and the consensus estimate has moved up as well.
Given this move in earnings estimate revisions and the positive technical factor, investors may want to keep their eye on CHWY for more gains in the near future.