EarningBeats.com Digest

Published: Mon, 12/23/19

EarningsBeats.com Digest for December 23, 2019

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Looking Ahead to Earnings Season

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It's never too early to begin looking. We're really just 3-4 weeks away from the start of earnings season, which seems kinda crazy, but it's truth. I was looking through the list of companies that will be reporting earnings in mid-January and found one that definitely appears to be heading toward a blowout report. I look to see relative strength and increasing volume to account for institutional accumulation. It's hard to ignore PPG Industries (PPG):

Of course, the red directional arrow in that bottom panel is one of two wild cards. Specialty chemicals stocks ($DJUSCX) have been lagging the S&P 500 for months and add a bit of uncertainty here. But volume surges in each of the three months this quarter that accompanied a 20% rise since early October paints a picture of institutional accumulation. The second short-term issue is that negative divergence. Don't be shocked to see that unwind over the next few weeks as PPG consolidates. I won't be surprised, however, to see a very strong earnings report when PPG reports on January 16, 2020.

Happy trading!

Tom Bowley

Chief Market Strategist

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