EarningsBeats Digest

Published: Wed, 09/09/20

EarningsBeats.com Digest for September 9, 2020

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Join Tom Bowley for a briefing on market activity on Mondays and Wednesdays from 9-9:30 am EST before the opening bell. Click here to listen live or visit our YouTube page later today to view the recorded session.

Tom Bowley's Daily Market Report - Warning Signs were Clear

Below is an excerpt from Tom's "Daily Market Report" from just over a week ago where he alerted members to market danger signs. I know from the feedback we got from EarningsBeats.com members that many took action to get out of the way of the recent heavy selling. Check it out:

"I'm much more of a short-term trader and I'm building significant amounts of cash. When warnings like these come along, I'd rather miss out on some upside than to hold during downside. That's just my preference, but the decision given these short-term bearish signals is up to each individual."

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Prepping for a Potential Pre-Earnings Advance

There are no certainties in the stock market, but in a bull market it's quite normal to see leading stocks bid higher as they approach their quarterly earnings report. The reason is quite simple. Stocks that have a history of beating estimates are typically accumulated leading up to that solid fundamental news. As the stock market sells off- particularly growth stocks that have benefited during this pandemic - we could find significant opportunities as we approach earnings reports. Here's a good example:

CTAS is a $34 billion specialty business services company that is scheduled to report earnings on Tuesday, September 22nd before the market opens. CTAS, as you can see from the chart, is a leader in its industry group and its industry group has mostly outperformed the S&P 500 since March. Buying leading stocks in leading industries during short-term pullbacks is a very solid and disciplined trading strategy. I've highlighted a key price support range on CTAS if it continues to run into sellers the next few days. I wouldn't be surprised to see buyers begin to drive the price higher as it nears its earnings date in two weeks.

Happy trading!

Tom Bowley

Chief Market Strategist

EarningsBeats.com
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