PennyMac Mortgage (PMT – Free Report) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, PMT crossed above the 20-day moving average, suggesting a short-term bullish trend.
The 20-day simple moving average is a popular trading tool. It provides a look back at a stock’s price over a 20-day period, and is beneficial to short-term traders since it smooths out price fluctuations and provides 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 PMT have been moving higher over the past four weeks, up 5.4%. Plus, the company is currently a Zacks Rank #3 (Hold) stock, suggesting that PMT could be poised for a continued surge.
The bullish case solidifies once investors consider PMT’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.
Given this move in earnings estimate revisions and the positive technical factor, investors may want to keep their eye on PMT for more gains in the near future.
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