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Alpha and Omega Semiconductor (AOSL) Crossed Above the 20-Day Moving Average: What That Means for Investors

Good things could be on the horizon when a stock surpasses the 20-day simple moving average. How should investors react?

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This story originally appeared on Zacks

Alpha and Omega Semiconductor (AOSL) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, AOSL crossed above the 20-day moving average, suggesting a short-term bullish trend.

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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.

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.

Moving Average Chart for AOSL

AOSL has rallied 6.7% over the past four weeks, and the company is a Zacks Rank #1 (Strong Buy) at the moment. This combination suggests AOSL could be on the verge of another move higher.

The bullish case solidifies once investors consider AOSL'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.

With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on AOSL for more gains in the near future.



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