Daqo New Energy (DQ) Crossed Above the 20-Day Moving Average: What That Means for Investors

From a technical perspective, Daqo New Energy (DQ) is looking like an interesting pick, as it just reached a key level of support. DQ recently overtook the 20-day moving average, and this suggests 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 DQ have been moving higher over the past four weeks, up 23.1%. Plus, the company is currently a Zacks Rank #1 (Strong Buy) stock, suggesting that DQ could be poised for a continued surge.

The bullish case solidifies once investors consider DQ's positive earnings estimate revisions. No estimate has gone lower in the past two months for the current fiscal year, compared to 3 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 DQ for more gains in the near future.

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