Lemonade (LMND Quick QuoteLMND - Free Report) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, LMND broke through the 20-day moving average, which suggests a short-term bullish trend.

A well-liked tool among traders, the 20-day simple moving average offers a look back at a stock's price over a 20-day period. This is very beneficial to short-term traders, as it smooths out short-term price trends and gives 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.

LMND could be on the verge of another rally after moving 8.5% higher over the last four weeks. Plus, the company is currently a Zacks Rank #3 (Hold) stock.

Once investors consider LMND'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.

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