EarningsBeats Digest

Published: Mon, 11/23/20

EarningsBeats.com Digest for November 23, 2020

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Now That Earnings Season Has Ended, Here Was My Favorite Earnings Report

There are plenty of technical analysts that pay little attention to volume. Don't confuse me with any of them. Our strategy at EarningsBeats.com revolves around finding companies that we believe are being accumulated. Institutions cannot accumulate a company's stock without volume. It simply can't happen. So I look for the combination of rising prices on heavier-than-normal volume among companies that beat Wall Street estimates as to both revenues and EPS. Enter SNAP, Inc. (SNAP):

In mid-October, SNAP reported tremendous growth in revenues and profits, well ahead of consensus estimates. Not only did SNAP see a significant gap higher the next morning, but it has continued moving higher on heavy volume. This reeks of accumulation. Check out the strength of the AD line, which only confirms the likelihood that SNAP is being heavily accumulated. Should the overall market weaken, SNAP could fall back into the 35-38 support zone, which would represent an excellent reward-to-risk entry point. Barring that, however, I'd continue to view rising 20 day EMA tests as solid entry points. It's also important to be in industry groups favored by Wall Street and there aren't many groups that look better technically than the internet space ($DJUSNS).

Happy trading!

Tom Bowley

Chief Market Strategist

EarningsBeats.com
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