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Sprouts Farmers (SFM) Just Flashed Golden Cross Signal: Do You Buy?

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From a technical perspective, Sprouts Farmers (SFM - Free Report) is looking like an interesting pick, as it just reached a key level of support. SFM recently overtook the 20-day moving average, and this 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.

Like other SMAs, if a stock's price is moving above the 20-day, the trend is considered positive. When the price falls below the moving average, it can signal a downward trend.

Shares of SFM have been moving higher over the past four weeks, up 5.3%. Plus, the company is currently a Zacks Rank #1 (Strong Buy) stock, suggesting that SFM could be poised for a continued surge.

Once investors consider SFM's positive earnings estimate revisions, the bullish case only solidifies. No earnings estimate has been lowered in the past two months, compared to 7 raised estimates, for the current fiscal year, and the consensus estimate has increased as well.

Investors may want to watch SFM for more gains in the near future given the company's key technical level and positive earnings estimate revisions.


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