As we hit earnings season, it’s time to start looking at where the strength is within the markets, so we know where to focus our efforts in taking advantage of the coming reports.
We’ve seen continuing strength within the Financial Sector (XLF) and a few positive earnings announcements from big investment banks early (ie. GS, C, JPM, etc.) as we continue to move further into earnings season:
Searching our proprietary Market Rover trend/trade software algorithm under all financial categories, we can also see a few names pop up with recent “trade idea” T-Signals within positive (green up arrow) trends:
Looking at the first name Allstate Corp (ALL) in our search and its technical chart, we can see:
- An uptrend
- Price retracing in early May ‘24 after a price + momentum divergence developing
- Price stop going down after June 14th at a 23.6% fibonacci retracement level and with subsequent momentum/relative strength (RSI) coming in underneath
- Holding right around the round $160 “psychological” trading number
- Price breaking up and out of a downward price channel:
That’s a LOT of signals out of the gate!
Drilling down on ALL within the Market Rover, we can see a “trade idea” signal flash on July 12th (confirming with technical chart/breakout), with a projected Target (T-1) level of around $168.60 and a potential Target (T-2) level of around $171.87.
In addition, should we look at an ALL trade with directional call options, earnings are scheduled to be announced on Wednesday, July 31st. We are likely to get additional implied volatility coming in (increasing call premiums) as we get closer to the earnings date.
However, we do not want to hold “trades” on/over earnings announcements and want to exit beforehand as a best practice.
Remember: the best way to find trade ideas like these ahead of earnings reports is to use Market Rover.
See you on the next one,
JB & Serge
