EarningsBeats.com Digest

Published: Fri, 05/15/20

EarningsBeats.com Digest for May 15, 2020

Can It Be Okay To Show Weakening AD and Relative Strength?

Generally, I'd shy away from a stock that is deteriorating in terms of relative strength vs. its peers and when its accumulation/distribution (AD) line is falling. But we do have to remember that price action is king. The other indicators simply confirm or refute the price action. As a result, when I look at a chart like Heartland Express (HTLD), I can remain bullish. Take a look:

There are some real positives on this chart. First, when the selling in March really kicked in, HTLD showed excellent relative strength and its AD line surged to a new 52 week high. Earlier this week, HTLD dropped 10%, but volume was very light and, thus far, price support just below 18.50 is holding. Note also that volume accelerated on Thursday and HTLD found buyers and reversed off key price support. That's a start to a potential uptrend. I'd grow more worried if HTLD were to close beneath 18.00-18.25. Otherwise, look for HTLD to regain momentum and eventually test the recent high price at 21.00. One final piece of this puzzle is the HTLD:$DJUSTK relative support line. Falling to a fresh new relative low would be difficult to defend.

Happy trading!

Tom Bowley

Chief Market Strategist

EarningsBeats.com
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