EarningsBeats.com Digest

Published: Mon, 05/04/20

EarningsBeats.com Digest for May 4, 2020

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Solid AD and Relative Strength Likely Precursor to Big Report

On Friday, I discussed American Intl Group (AIG), which showed significant distribution and poor relative strength within a very weak industry group. This morning, I want to highlight a company that appears to be under significant accumulation and is showing excellent relative strength within an industry group that's been leading U.S. equities higher. Regeneron Pharmaceuticals (REGN), a biotech company ($DJUSBT), has an accumulation/distribution line that's been rising for months. REGN's relative strength has been rising for months as well:

Since the pandemic began, REGN has seen its volume explode. The biggest issue being long is that a lot of potential good news is already built into the stock price. So any disappointment could lead to a short-term selloff. I'd be watching initial price support just beneath 500, along with the rising 50 day SMA, currently at 490. A reversal in this area could lead to a 15%+ gain back to recent highs just above 570. I believe Wall Street is looking for a very big report on Tuesday before the opening bell.

Happy trading!

Tom Bowley

Chief Market Strategist

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