EarningsBeats.com Digest for May 6, 2022
A quick note from the EarningsBeats' team: Thanks for your patience in receiving today's EarningsBeats Digest. Tom Bowley, our Chief Market Strategist, wanted to share an important chart and discussion surrounding earnings reports as the two most voluminous earnings days of this quarter just passed. We
hope you enjoyed today's delayed version, and we will return to our regular pre-market timing on Monday.
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If I Had To Hold A Stock Into Earnings...
Fortunately, no one is forcing me to hold any stock into earnings and, if you've been watching some of these growth stocks this week, then you probably know that holding stocks into earnings presents incredible risk. A couple days ago in my Daily Market Report that I send out to EB.com members, I highlighted 8 stocks that would be reporting earnings
on either Wednesday or Thursday. They were all among those stocks that led the market higher post-pandemic (in 2020 and/or 2021). But since late last year, these stocks have been crushed. Here are the 8 stocks that I provided, the price then, and the price at today's low AFTER earnings have been released:
- SHOP: $454.64 (two days ago), $355.13 (today's low)
- EBAY: $53.22, $47.03
- TWLO: $109.92, $104.50
- ETSY: $99.30, $81.11
- SQ: $97.21, $88.56
- ILMN: $298.74, $240.03
- NET: $84.32, $60.90
- BILL: $161.39, $109.09
My purpose in providing these charts was to make our members aware of the nearly 1000 companies that were set to report quarterly earnings over the upcoming two-day period. All 8 of the above stocks were very poor performers relative to their industry peers. Some might think, "well, they're beaten up enough, how much lower can they possibly go?"
Well, look at the their intraday lows this morning. I'd say the answer to that question is "A LOT". If I had to hold a stock into an earnings report, I'd consider a stock that's in a good space showing leadership. On Monday morning, Exelon Corp (EXC) will be reporting results and I absolutely LOVE this chart:
EXC is a strong stock in the conventional electricity ($DJUSVE) space. I know it's boring, but in this market environment, I prefer boring. EXC recently was above $50 per share and has pulled back nicely to its 50-day SMA. Note that its PPO is also nearing its centerline, where I'd expect a bounce. Finally, I've drawn two horizontal support lines that, if EXC sells off a bit after earnings, I expect to hold. There's still plenty of
risk holding EXC into earnings, but if you're forcing me to choose the type of stock I want to hold into earnings, then EXC is it. It's definitely not SHOP, EBAY, TWLO, ETSY, SQ, ILMN, NET, or BILL.
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Tom Bowley
Chief Market Strategist
EarningsBeats.com
Better Timing. Better Trades.
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