Sprouts Farmers Recently Broke Out Above the 20-Day Moving Average

After reaching an important support level, Sprouts Farmers SFM could be a good stock pick from a technical perspective. SFM 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.

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.

Shares of SFM have been moving higher over the past four weeks, up 5.5%. Plus, the company is currently a Zacks Rank #1 (Strong Buy) stock, suggesting that SFM could be poised for a continued surge.

The bullish case only gets stronger once investors take into account SFM's positive earnings estimate revisions. There have been 8 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 SFM for more gains in the near future given the company's key technical level and positive earnings estimate revisions.

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