EarningsBeats.com Digest for November 10, 2021
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Earnings Reaction Portfolio
Wednesday, November 10th at 5:30pm ET
About the Event: Join Tom Bowley, Chief Market Strategist as he unveils his Top 10 Stock Picks for our new Earnings Reaction Portfolio. These picks are designed to be held for the subsequent 90 day period. The day after companies report earnings, we look at opening and closing prices to determine whether accumulation is taking place. The companies with the
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To some degree, this depends on your time frame. As a mostly short-term trader, I'm interested in identifying tops, even if it's simply for a couple of days or a week. Others may not be concerned about short-term failures like that, instead being concerned only with the BIG picture. There's not a right or wrong answer, it just DEPENDS.
If I see a major price resistance level that needs to be negotiated, then I'm likely to be a seller as such resistance is approached and/or tested. Let me give you an example - Unity Software, Inc. (U). U was set to report its latest quarterly results on Tuesday after the bell. It had just touched key price resistance (and failed) near the 175 level:
A stock can open ANYWHERE after reporting quarterly results. A major positive for U was that its industry group - software ($DJUSSW) - happens to be one of the strongest groups in the market. The bad news is that, after soaring in 2020, U had not been a leader in its space in 2021. So the picture heading into its earnings report Tuesday afternoon was mixed at best. U reported quarterly revenues well ahead of expectations, but its EPS
simply matched expectations and, unfortunately, that didn't seem to be good enough. In after hours action, U dropped more than 6% to 161. U could have exploded into record high territory after earnings, but I'd rather be safe than sorry when it comes to earnings reports and their initial reactions. I see the rising 20-day EMA as a solid entry point for U and it could come into play sooner rather than later.
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Tom Bowley
Chief Market Strategist
EarningsBeats.com
Better Timing. Better Trades.
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