I'm generally an optimistic person, especially when it comes to the stock market.
But there are always two sides to a stock's story. Dynatrace, Inc. (DT) was an earnings-season darling after posting revenues and EPS that easily surpassed consensus estimates. DT jumped about 23% in 5 days after that quarterly report. Software stocks ($DJUSSW) have continued moving higher, while DT has returned to the "scene of the crime" (not really a crime, just a test of gap support):
Enter Dynatrace, Inc. (DT):
The red circles highlight a number of negatives on this chart. But just 5-6 weeks ago, DT was one of the hottest software stocks in a rapidly-improving industry group. What happened? I never expected we'd see the bottom of gap support. Typically, the top of gap support holds when a stock explodes higher after earnings on massive volume and keeps rolling higher for a few days to a few weeks. Not this time, however. So is DT a buy here? Well, it's an aggressive trade, because it's now lagging its software peers. The good news, though, is that you can keep a very tight stop. I'd exit on any close beneath 37.50. And my target would be that early-February high near 48.00. It's certainly no slam dunk, but it's tempting for an aggressive trader.
 |
Happy Trading!Tom BowleyChief Market StrategistEarningsBeats.comBetter Timing. Better Trades. |