EarningsBeats.com Digest

Published: Fri, 06/12/20

EarningsBeats.com Digest for June 12, 2020

Using Panicked Selloffs To Our Trading Advantage

I'm an advocate of taking profits periodically for many reasons, but one is definitely being in a position to take advantage of great companies selling off with the overall market. When the market panics amidst a huge increase in volatility (the VIX soared 48% on Thursday), sometimes it's a case of the "baby being thrown out with the bath water". One of our portfolio stocks, MACOM Technology Solutions Holdings (MTSI), could be such a stock and one that I'll be watching closely from a trading perspective. Here's the current chart:

MTSI was one of only 6 (out of 40) of our portfolio stocks that underperformed the S&P 500 on Thursday. But it still has a SCTR (StockCharts Technical Rank) score of 90 and it's on our Strong Earnings ChartList (SECL). Given the negative divergence, it's not out of the question that we'll see a 50 day SMA test and a reset of the PPO at centerline support (pink arrows). A very strong reward to risk entry would be just above 28 and even building a position on the way down (since there are no commissions on trades any longer) would make solid technical sense to me.

Happy trading!

Tom Bowley

Chief Market Strategist

EarningsBeats.com
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