The Shakedown 4/14/19

The Rise Continues

The S&P added 0.7% to it's 2019 return total of 16% thus far as we saw JP Morgan shine with the kickoff of earnings season. Wells Fargo sold off proving all banks don't trade in lock step and a company's management team is still quite important. Disney announced it's new streaming service sending the stock 11.5% higher breaking out of a 4 year monthly base. Earnings season is officially upon us -- which means it's time to get to work!

Earnings Season is always my most active time trading as its the biggest catalyst a stock will have for the next 3 months. Every season we improve our strategies incrementally and I couldn't be more excited at the prospect at what's in store this quarter. The consensus heading in is that it will be the worst earnings in years with the trade war and yadda yadda yadda, we'll let the charts do the talking. We have the rest of the banks early in the week along with the airlines and select tech behemoths Tuesday night like NFLX and IBM. This week is categorized with more of the mega cap companies like the banks or Union Pacific UNP or Schlumberger SLB and we (I) can look forward to more growth stocks reporting next week. I like to compile a watchlist of the best acting stocks after their report and look for setups in them in the days and weeks to come. Nothing better than a stock that holds its earnings gap up. 

 

*A Reminder it is no one's job but your own to know when your stocks are reporting earnings. Don't get caught in a gap down because you didn't do the necessary research

We love it when fundamentals match up with technicals during earnings season so I'm going to use LULU as an example of exactly what we're looking for out of a stock

First and foremost, the technicals have to show demand for the stock. Love that it gapped to a new all time high and held onto the gap up, turning that previous all time high resistance into new support. 

Charts above via koyfin and seeking alpha.

We can see this quarter that their earnings are continuously growing and revenue showed acceleration as it grew 7% quarter over quarter compared to last quarters 5% growth. This information tells us the growth rate is still there for this company. 

The probability of a stock like this increasing in share price is HIGH with the technicals showing a flag at all time highs and the fundamentals showing consistent growth.

These are the stocks we want to dig up and focus in on.

A Few Chinese Names on the Radar 

SPOT Long

We watched this SPOT all last week and got some great info out of the stock. Looks ready to make a pre earnings run out of this mini base if it can have a large volume day through 146ish resistance. I'm looking at last week's high (146.20) for an entry. With earnings in 11 trading days, this one is quickly running out of time for the run, want to see the move early in the week.

Trigger: $146/146.25

Stop: $139.89/141.89

Target: $160-172+

Hope to see you in the chat Monday!

Watchlist in email to follow.


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