EarningsBeats.com Digest for March 16, 2022
|
Trading Places Live!
Join Tom Bowley for a briefing on market activity on Mondays and Wednesdays from 9-9:30 am EST before the opening bell. Click here to listen live or visit our YouTube page later today to view the recorded session.
Evaluating A Reversal At Gap Support
One of our basic scanning techniques is looking for stocks making possible reversals to the upside after an extended decline. I ran a scan of stocks on our Strong Earnings ChartList (SECL) today that had shown lower highs and lower lows for 5 straight days prior to today. Today showed a higher high, reversing the prior trend. There were 5
stocks returned from this scan as follows: CHD, PG, PM, TWNK, and STX. I want to focus on STX as it's just tested a key gap support level:
The good news is that the bulls stepped in exactly where they needed to - at gap support. But there's plenty of bad news here. First, check out that daily PPO. It is pointing lower, so any rebound is likely to be short-term as overall price momentum remains quite bearish. Next, check out that AD line. It's been trending lower for months, suggesting Wall Street distribution. Computer hardware ($DJUSCR) is currently under
pressure and the group's relative strength vs. the S&P 500 just hit a multi-month low. That tells us the group is weak. And STX shows relative strength vs. its peers that's much closer to its 52-week relative low than its 52-week relative high. If STX is able to mount a decent rebound off Tuesday's reversal, it's likely to be very short-lived.
|
Tom Bowley
Chief Market Strategist
EarningsBeats.com
Better Timing. Better Trades.
|
|
|
|
