Allegro MicroSystems, Inc. (ALGM Quick QuoteALGM - Free Report) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, ALGM crossed above 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.

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.

ALGM has rallied 14.4% over the past four weeks, and the company is a Zacks Rank #1 (Strong Buy) at the moment. This combination suggests ALGM could be on the verge of another move higher.

The bullish case only gets stronger once investors take into account ALGM's positive earnings estimate revisions. There have been 3 revisions higher for the current fiscal year compared to none lower, and the consensus estimate has moved up as well.

Investors should think about putting ALGM on their watchlist given the ultra-important technical indicator and positive move in earnings estimate revisions.