EarningsBeats.com Digest for October 21, 2020
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As Earnings Season Kicks In, We Want To See Relative Strength
Typically, the best earnings reports tend to occur in industry groups that are significantly outperforming the S&P 500. For example, the recent surge in renewable energy ($DWCREE) will likely be followed by tremendous quarterly reports in that space and/or increased guidance. But renewable energy is only one such industry. There are plenty of others. One industry group that's recently caught fire has been footwear ($DJUSFT).
The group had sideways consolidated on a relative basis before breaking out during August. Since that time, the DJUSFT has been flying higher and several footwear companies will most likely see the benefit come earnings time. One of my favorites is Crox, Inc. (CROX):
It cleared its January high to open October and CROX has tacked on another 15% since then. Volume trends are bullish and the AD line has been consistently strong as well. The latest bullish signal, however, has been CROX's breakout vs. its footwear peers in just the past few days. Being part of a strong industry is bullish, but being a leader in that industry is exactly what we look for. CROX will be reporting in one week, next Tuesday
before the bell. I expect we'll see an excellent earnings report.
Happy trading!
Tom Bowley
Chief Market Strategist
EarningsBeats.com
Better Timing. Better Trades.
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