Trade Alert: Earnings, 9/18/2023
A bullish bet on a company reporting before tomorrow's open.
Getting Back To Earnings Trades
Last week, I didn’t see any attractive earnings trades. Partly, that was a result of declining volume, as we’re getting toward the end of Q2 earnings season. This week, there are a few that look interesting.
Remember the metrics we’re using when selecting these 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.
Another metric I keep an eye on but don’t post all the time is short interest. If short interest is in the mid-to-high teens or higher, I’ll note it here.
Our Bullish Stock
Here’s how today’s first retailer stacks up on our seven metrics:
Social data: +51.
PA Options sentiment: Bullish.
Setup rating: 7
Zacks ESP: 2.88%
Recent insider transaction(s): net open market sales in June and July.
Today’s Bullish Trade
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