Earnings season is rolling right along, and companies continue to beat analyst estimates. Investors are starting to feel more optimistic about the market as a result.
Some analysts have noted, however, that earnings in Q3 (thus far) are actually down relative to Q2. Yes, corporations are surpassing EPS expectations, but not by much. And while that may give bulls a reason to worry, it doesn’t change the fact that playing earnings has been a consistent affair.
Traders who go long or short on a stock post-earnings (depending on which way share prices go) have had plenty to talk about over the last week.
By and large, shares have plodded along in the direction of the stock’s price action after earnings are announced.
And coming up on Wednesday, another rising company is going to report. In this case, a huge run to new all-time highs could be waiting If the stock’s EPS beats expectations.
For short-term traders, that’s great news, because all this stock needs to do is move past key resistance from a few weeks ago.
In the weekly candlestick chart above, you can see that Blackstone Group (NYSE: BX) has had a fantastic 2019.
Since the start of the year, the stock has set four consecutive higher lows. As a shareholder, you can’t really ask for much more than that. There was a sell-off in September, of course, but in general, it’s been “all good.”
And for short-term traders, that sell-off has presented a promising opportunity to go long. The 50-week moving average is trending upwards, the current weekly candlestick is trading above the last two, and the stochastics are exhibiting signs of hidden bullish divergence, which involves a higher low in price and lower low in the stochastics.
Hidden bullish divergence is often associated with trend continuations, which in this case, certainly looks possible.
Best of all, BX is set to announce earnings on Wednesday, October 23rd, before the market opens. During the following trading session, if BX is trading above resistance from a few weeks ago (as shown in the chart), it might make sense to go long at our trigger point of $50.42. If BX ends up soaring past that point by a wide margin, it will have risen too high, making a long position too risky.
So, come Wednesday, keep an eye on BX. If earnings look good, this stock could easily rocket upwards, setting a new all-time high to close out the year. Its shares are already in an uptrend, but if the company’s financials satisfy investors too, BX could quickly become one of the year’s best-performing stocks.
