Hit 25.00 target, and leaving long tail above 25.00. Could be reversing candle here. I'd move my FINL position into cash....keep reading

Usually a market bottom. Reversing candlesticks are candlesticks that portend a reversal in the security or index that you're observing. The idea behind a reversing candlestick is that after a lengthy period of rising or declining prices, market makers begin taking the other side of the trade, flooding the market with either buy or sell orders to reverse the action and profit handsomely from this action and reversal. After the S&P 500 declined for 6 consecutive sessions, a bullish engulfing candle printed on very heavy volume:...keep reading

This is an interesting question that we face over and over again as traders. When do you take that trade? When do you ignore it? A little over a week ago, Aaron's (AAN) reported an absolute blowout bottom line. Wall Street consensus estimates were looking for .27 per share, but AAN reported an actual .66 per share. Wall Street clearly was impressed as AAN spiked from a close of 10.22 on April 24th to an open of 12.25 on April 25th. That's a 20% spike on earnings results. Here's how it looks on the chart:...keep reading

It's been a very rough year for many stocks, but few have been beaten up as badly as Meta Platforms (META, formerly Facebook). META hit a 2002 high on January 4th at just above 343. Ten months later, on November 4th, META reached its low at 88.09. That's nearly a 75% haircut in less than a year. Ouch! META's latest miscue came as it reported its Q3 quarterly earnings. After coming up significantly short of its EPS consensus estimate and issuing a Q4 warning, META gapped down, taking out its previous price support of 123.53. Despite its weakness in early November, META staged a rally, reaching a high close of 123.49 last Friday. Unfortunately, that's where its current advance ended....keep reading

In Tuesday's DMR, I provided a half dozen examples of earnings gaps and how, in many instances, the top of the gap will provide the key support during pullbacks. If you want to look at charts, check out MEDP and CALX as two perfect examples. Both of these stocks saw their gap support tested rather quickly. Sometimes, gaps will be tested much later, possibly weeks after the gap prints. Catalyst Pharmaceuticals (CPRX) is an example of having to wait weeks for gap support to be tested. Check this out:...keep reading

I believe that semiconductors ($DJUSSC) are the most important industry group. It doesn't mean that the stock market can't move up or down without participation from this group, but it certainly makes it more difficult. The DJUSSC topped on the last trading day in March. The S&P 500 continued pushing slightly higher for another couple weeks, but ultimately could not clear the major price resistance established in early February. One big reason was the lack of participation of semiconductors. Fortunately, the group is in a much better position to move higher from here:...keep reading

In Japanese, marubozu means "dominance". And when you look at supply and demand in the stock market, nothing screams dominance quite like a marubozu candle. A bullish marubozu candle opens at or very near the low of the day and closes at or very near the high of the day. It's simply a day of unrelenting buying and is much more powerful when accompanied by exceptionally-high volume. Many times we'll see these types of candles form with heavy volume after a big announcement like quarterly earnings results. Fiserv, Inc. (FISV) was one stock with such an announcement on Tuesday morning. Check out the stock market reaction:...keep reading

It's always a good idea to occasionally step back and look at the bigger picture - not just for the major indices, but also for sectors and industry groups. Over the past several years, it's been a wild ride to nowhere for the broadcasting and entertainment industry ($DJUSBC). We saw several significant lows in 2014 through 2016 in the 900-1000 range. That area was then revisited at the pandemic low in 2020. After more than doubling during the next 12 months, yet another big slide began in 2021:...keep reading

It wasn't too long ago that I pointed out a key overhead price resistance on Tractor Supply Company (TSCO) at 207. We needed to see a breakout as we can't assume a breakout will happen. TSCO did later breakout above that key resistance. During bullish patterns, many times breakouts are required to confirm those bullish patterns. Yelp, Inc. (YELP) is a company that currently resides on our Strong Earnings ChartList (SECL). It's printed a gorgeous cup and it appears the beginning of a handle may be forming:...keep reading

High wave candle on big volume suggests indecision here. SIGM doesn't know which way to go. We still like it though and hoping we can get entry a bit lower....keep reading

Hit target at 57.00 and has continued trucking higher. We will adjust our trading strategy on this one tonight. Chart Updated 10/22/13...keep reading

I don't buy or sell stocks based on historical trends, but history does provide us an important lesson. Ignore it at your own peril. The bearish period from the July 17th close through the September 26th close ends today at the close. While that doesn't mean we should expect soaring prices beginning tomorrow, it is one additional indicator to at least be aware of. Here's a quick glance at how the S&P 500 has performed by month over the past 10 years - ever since the S&P 500 cleared its overhead price resistance from 2000 and 2007:...keep reading

Exelon Corp (EXC) received bad news this week when Illinois regulators rejected EXC's updated grid plan and rate hike. While the news was bad, the action on the chart was worse. Volume exploded higher, but unfortunately it accompanied a price support breakdown, opening the door to deeper losses ahead. Below is a 10-year weekly chart for EXC and you can see first that the weekly PPO has taking a big hit and shows accelerating downside momentum....keep reading

Tractor Supply Company (TSCO) has been one of the best-performing specialty retailers ($DJUSRS) of 2022. TSCO has been trending higher on a relative basis since November 2021. While price action has been moving lower, TSCO has seen its AD line rising, especially over the past 2-3 months. Given this relative strength, I believe Wall Street has been accumulating the stock:...keep reading

Making a HUGE breakout today with very heavy volume. 23.81 would now represent the best initial entry, but earnings is only a couple weeks away. We'll keep watching this one, but it might be unlikely we'll trade it....keep reading

Volume trends here continue to suggest accumulation. But we could use a bit more selling near-term before entry. We haven't changed the trading strategy here, but 25.25-25.75 would be a decent price to establish a small position for those not wanting to wait for a further drop....keep reading

This boils down to personal preference. I'm typically not a fan of gold ($GOLD). Despite all the media reports of the runaway inflation that we should be expecting, inflation has stabilized and gold has been unable to outperform the S&P 500. We've had high volatility ($VIX), which suggests a lot of fear. And fear is one ingredient required to stimulate gold prices. But again, there's been little relative strength in gold the past few years. Check this chart out:...keep reading

One by one, we've seen industry groups move from downtrending prices to uptrending prices. Several of these uptrends are much more advanced than others, but one that seems to just be turning higher is media agencies ($DJUSAV), which belongs to the communication services sector (XLC). After a long and steady decline that's spanned nearly a year, the DJUSAV gapped up earlier this week to confirm what I believe is a new uptrend:...keep reading

While our focus at EarningsBeats.com will always be technicals and fundamentals, we certainly do not ignore seasonal tendencies. Some are very strange - like the fact that home construction stocks ($DJUSHB) perform much better in the 3-month period from November through January than in any other 3-month period of the year. Common sense might suggest that these stocks would do well in Spring. But over the last two decades, this group has averaged returning 9.5% every November through December, while gaining just an average of 0.6% from April through June. That just doesn't seem right, does it? Well, another very odd seasonal tendency is for Netflix (NFLX) to open the new year on an absolute roll:...keep reading

When the Volatility Index ($VIX) moves in lockstep with the S&P 500 for a period of time, you need to be prepared for a sudden price reversal in the S&P 500. This positive correlation doesn't happen often, but here's a very quick report that I sent out to our EarningsBeats.com members last Thursday, literally just before the S&P 500's 5% climb in 5 days:...keep reading