EarningsBeats.com Digest for September 23, 2020
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Rock Solid Support Tends To Provide The Best Reward To Risk Entry Levels
On August 12th, Xpel Inc. (XPEL) posted absolute blowout quarterly results. Revenues came in at nearly $36 million while Wall Street was expecting just over $26 million. EPS nearly tripled estimates, $.14 vs. $.05. The stock market reaction was what you might expect. A gap higher from the August 11th close ($20.66) to $22.80, but the bulls were just getting started. By the close on the 14th, XPEL had surged to $29.61. That
was roughly a 45% advance in 3 trading days. If you think that type of advance is too much, well Wall Street agrees with you. XPEL proceeded to fall back to test the top of gap support just a few weeks later:
One week later, XPEL approached $29.00. Obviously, volatility here has been off the charts (no pun intended). Six trading days after nearly visiting the August high, we find XPEL back at the top of gap support once again. Tuesday's low reached $22.89 before traders sent the stock back up to $23.65, closing near its high of the session and printing a hammer in the process. The trading range on XPEL, in my view, is from $22.80-$29.61.
The low end of this trading range has proven on one occasion to be an excellent entry opportunity. The rising 50 day SMA, currently at $22.23, should also provide great support. I'd look for another rally from XPEL's current price.
Happy trading!
Tom Bowley
Chief Market Strategist
EarningsBeats.com
Better Timing. Better Trades.
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