EarningsBeats.com Digest

Published: Mon, 12/09/19

EarningsBeats.com Digest for December 9, 2019

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Dear EarningsBeats Digest Member,

Tom Bowley's ChartWatchers Article

In case you missed it over the weekend, here is a link to Tom's ChartWatchers article.

https://stockcharts.com/articles/chartwatchers/2019/12/to-profit-from-trading-you-mus-852.html

I'm pointing this out because when you read it you will see that in today's Daily Market Report Tom is going to be providing members with 5 stock setups that you might find quite interesting and that could make you some money!

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When Is It Okay To Buy An Underperforming Stock?

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Honestly, I try not to buy underperforming stocks. But if we take a decent area of the market - like defense stocks ($DJUSDN), I'd only consider trading an underperformer if it was literally right on a key price support level. Better yet, an intraday low that would mark a breakdown, followed by a reversal that day would be best. Kratos Defense & Security Solutions (KTOS) hasn't seen that intraday breakdown and reversal yet, but it is nearing key price support and doing so on much lesser volume this time:

I've circled the volume that accompanied the selling in August and September - it was very heavy. The selling the past few weeks has been on much lesser volume, so it's entirely possible that the sellers are running out of momentum. KTOS is not on our Strong Earnings ChartList, so I wouldn't trade it. However, a false breakdown and reversal at the 17 level could certainly lead to a nice short-term trade here. 19.50-20.00 would represent a major test of price resistance.

Happy trading!

Tom Bowley

Chief Market Strategist

EarningsBeats.com
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