Trade Alert: Earnings, 10/26/2023

Five bullish trades and two bearish trades on companies reporting after the close today or before the open tomorrow.

Today’s Earnings Trades

Recall we are looking at seven different metrics for earnings trades:

• LikeFolio’s earnings score based on social data. The higher the number, the more bullish, the lower (more negative) the number, the more bearish.

• Portfolio Armor’s gauge of options market sentiment.

• Chartmill’s Setup rating. On a scale of 1-10, this is a measure of technical consolidation. For bullish trades, we want a high setup rating; for bearish trades, a lower one.

• Zacks Earnings ESP (Expected Surprise Prediction). This is a ratio of the most accurate analyst’s earnings estimate versus the consensus estimate.

• The Piotroski F-Score. A measure of financial strength on a scale from 0-9, with 9 being best.

• Recent insider transactions.

• RSI (Relative Strength Index). A technical measure of whether a stock is overbought or oversold. We’re looking for RSI levels below 70 for bullish trades and above 30 for bearish ones.

None of these metrics alone are dispositive, but we’ll consider the preponderance of evidence when placing our bets. Based on last week’s results, I had been giving a bit more weighting to Zacks ESP and RSI this week.

On to today’s stocks. We’ve got trades on five reporting after the close today or before the open tomorrow.

The Stocks We’re Bullish On

Bullish Stock #1

1. Social data: +91.

2. PA Options sentiment: Bullish.

3. Setup rating: 7

4. Zacks ESP: 0% (Neutral)

5. F-Score: 5

6. Recent insider transaction(s): Open market sales every month since March.

7. RSI: 37

Bullish Stock #2

1. Social data: +65.

2. PA Options sentiment: Neutral.

3. Setup rating: 6

4. Zacks ESP: 0.77%

5. F-Score: 5

6. Recent insider transaction(s): Open market sales every month from last November to August, with one open market purchase in June.

7. RSI: 25

8. Short Interest: 12.7%

Bullish Stock #3

1. Social data: +33.

2. PA Options sentiment: moderately bullish.

3. Setup rating: 6

4. Zacks ESP: 7.39%

5. F-Score: 5

6. Recent insider transaction(s): Open market sales every month over the last year.

7. RSI: 41

Bullish Stock #4

1. Social data: +32.

2. PA Options sentiment: Bullish.

3. Setup rating: 8

4. Zacks ESP: 0.44%

5. F-Score: 8

6. Recent insider transaction(s): Open market sales most months over the last year.

7. RSI: 42

Bullish Stock #5

1. Social data: +29.

2. PA Options sentiment: Moderately Bullish.

3. Setup rating: 8

4. Zacks ESP: 0% (Neutral)

5. F-Score: 8

6. Recent insider transaction(s): Open market sales in the first and second quarters.

7. RSI: 42

The Stocks We’re Bearish On

Bearish Stock #1

1. Social data: -22.

2. PA Options sentiment: Moderately Bearish.

3. Setup rating: 6

4. Zacks ESP: 0% (Neutral)

5. F-Score: 6

6. Recent insider transaction(s): None in the last 12 months.

7. RSI: 55

Bearish Stock #2

1. Social data: -24.

2. PA Options sentiment: Moderately Bullish.

3. Setup rating: 2

4. Zacks ESP: -2.11%.

5. F-Score: 5

6. Recent insider transaction(s): Mostly open market sales over the last year.

7. RSI: 35

These are a lot of trades, so we’re going to aim for attractive prices on all of them (prices giving us a shot at 100% gains or more if the stock moves in our direction) and not chase them.

Details below

Bullish Trade #1