Daqo New Energy (DQ) Just Overtook the 20-Day Moving Average

Daqo New Energy (DQ) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, DQ 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.

The 20-day moving average can show signals that are similar to other SMAs as well. 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.

DQ has rallied 21.8% over the past four weeks, and the company is a Zacks Rank #1 (Strong Buy) at the moment. This combination suggests DQ could be on the verge of another move higher.

The bullish case only gets stronger once investors take into account DQ's positive earnings estimate revisions. There have been 2 revisions higher for the current fiscal year compared to none lower, and the consensus estimate has moved up as well.

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

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