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Dear Members:
First, mark your calendars for Monday, July 15 when we will conduct our Q2 Earnings Webinar. The webinar will focus on stocks that have already reported by that time as well as companies about to report that could make significant moves once their numbers are released. Details will follow as we get closer to the event.
Next, make sure you check out my article that will appear in this weekend's StockCharts.com's "ChartWatchers" newsletter.
At your service,
John Hopkins
EarningsBeats.com
Today's Focus: Relative Strength
Given the selling earlier in the week, many stocks moved down to key support or are quickly approaching it. Some have even dropped below, under-performing many of their peers. Beware stocks that lose key price support levels and show weak relative performance. The next earnings season is just around the corner and Wall Street may be sending us a signal that those stocks might be seeing changes in their business and outlook. One such company is E*Trade Financial Corp (ETFC):
ETFC is part of the Strong Earnings ChartList because, at the time of its latest strong quarterly earnings report, it gapped higher and held its rising 20 day EMA during its initial pullback. But a lot has changed since then. One look at its relative strength vs. investment services ($DJUSSB) and the benchmark S&P 500 ($SPX) tells us that traders are bailing on the stock. If the 10 year treasury yield ($TNX) were to stage a bit of a rally, that would help ETFC, but it would likely help other financial stocks more. Remember, we want to focus on stocks showing relative strength, not weakness.
Happy trading!
Tom Bowley
Sr. Technical Analyst
StockCharts.com
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