After reaching an important support level, AudioEye (AEYE) could be a good stock pick from a technical perspective. AEYE 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.
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.
AEYE could be on the verge of another rally after moving 19.7% higher over the last four weeks. Plus, the company is currently a Zacks Rank #2 (Buy) stock.
The bullish case solidifies once investors consider AEYE's positive earnings estimate revisions. No estimate has gone lower in the past two months for the current fiscal year, compared to 2 higher, while the consensus estimate has increased too.
Investors should think about putting AEYE on their watchlist given the ultra-important technical indicator and positive move in earnings estimate revisions.
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