EarningsBeats.com Digest for October 5, 2020
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"Creating a User-Defined Index"
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A Software Leader That's Threatening A Breakout
Software ($DJUSSW) remains a leader and I believe we'll see another relative push higher as earnings season approaches. One stock in this space that's currently on our Strong Earnings ChartList is Covetrus, Inc. (CVET), a $3.1 billion company that's been threatening to break out above 25. There have been multiple attempts at a breakout over the past 7 weeks or so, but none have stuck. The chart below clearly shows the resistance at
25:
Primary support resides near 19, so if it cannot make the breakout, there's certainly the potential for a significant pullback. The daily PPO had fallen back just below centerline support, but it's improving again as bullish momentum appears to be strengthening. Finally, the AD line set a new high in August and it too has begun strengthening again. The low on both Thursday and Friday remained above its rising 20 day EMA, a sign of a trending
stock. I believe we're on the verge of a breakout, but we'll soon find out.
Happy trading!
Tom Bowley
Chief Market Strategist
EarningsBeats.com
Better Timing. Better Trades.
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