EarningsBeats.com Digest for November 1, 2021
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Is This Accumulation or a Possible Breakdown?
We do a TON of research around earnings season. One thing, in particular, that we look for is significant accumulation immediately after earnings are reported. Some companies see that accumulation leading up to earnings, while others see it AFTER earnings are reported. We rank stocks in order of "Open to Close AD Gains", which is simply
the percentage gain from the opening bell to the closing bell on the day after a company reports its earnings. It's just one way of looking at accumulation vs. distribution. Typically, there's heavy volume after new fundamental news, like earnings, is released. One of the strongest "Open to Close" stocks thus far in Q3 earnings season is Alcoa Corp (AA), which ran 7.86% from open to close on October 15th. It has since fallen back considerably, so is it bullish or bearish?
Take a look:
I see great support on AA at the 45 level. That represented prior tops in May and August and, after breaking out above 45, we've seen 3 successful tests of this support level. I expect that we'll see a number of companies show much better accumulation after earnings, but AA has been among the best up until now. I believe 45 support holds....until it shows that it doesn't.
If this concept of a portfolio of 10 equal-weighted, high-accumulation stocks is interesting, be sure to join me this Wednesday, November 3rd at 4:30pm ET as I discuss our strategy and recap last quarter's performance. It'll be another highly educational event and one that you're all invited to. We'll be sure to get room instructions out to everyone in Wednesday's EB Digest.
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Tom Bowley
Chief Market Strategist
EarningsBeats.com
Better Timing. Better Trades.
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