Sallie Mae (SLM (NASDAQ:SLM)) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, SLM broke through the 20-day moving average, which 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.
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.
SLM has rallied 13.8% over the past four weeks, and the company is a Zacks Rank #1 (Strong Buy) at the moment. This combination suggests SLM could be on the verge of another move higher.
The bullish case solidifies once investors consider SLM's positive earnings estimate revisions. No estimate has gone lower in the past two months for the current fiscal year, compared to 4 higher, while the consensus estimate has increased too.
With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on SLM for more gains in the near future.
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