Trading Saul Stocks

ELF setting up in a base, possible early entry in the works. It was a SS buy for me recently. Would like to compound that with an IBD breakout.

CRWD: 3 heavy sell-off days in a row after the CRM disaster. Earnings tomorrow. You would think cybersecurity will not feel the pinch of antsy CFOs and CIOs, but you never know.

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CRWD up 6% after hours. The SS Joan-of-Arc chart says watch CRWD for a buy signal tomorrow.

AXON keeps putting on new smiley faces each, so still going down but telling us to be ready.

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I would think ample caution should be used around earnings?

The CRWD decision and the (10%) move on earnings is an earnings displacement. The chart will work, but has little predictive power at this moment.

++Not a chart trader++ No position in CRWD

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Generally true, certainly don’t want to chase at upper market, but strong stocks that have been demonstrating relative strength and in a strong market would be a target for purchase on a likely pull-back. CRWD is such a stock but the market has some insecurity. Nothing trades in a vacuum.

It would be a good target for a post-earnings gap watchlist. Strong earnings gap stocks often go on to form a flag/pennant or similar bullish pattern in the next week or so, then often have strong breakouts from that pattern.

Lakedog

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But the way this market has been acting it looks to open strong and then sell off .

Andy

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Andy,

A bit early to declare.

I thought about taking a bite at 7 am, after it printed that hammer but had to go out the door to take my wife to a doctors appt (damn doctors :crazy_face:). Such is life.

I am sure a good number of retail traders took a bet on good earnings in a strong stock, were rewarded and took profits. Pretty typical in these cases, but I’m not a day trader. Sure, it could fail at day’s end, but I tend to doubt it. Suspect it will pull back some below the high of the day. Regardless, I am putting it on a watchlist as I suspect it will “take a breather” and form a flag. If it closes above it’s initial high of the day, it might shoot. Personally, I don’t play these much anymore. Happier to do iron condors leading into earnings or follow patterns after earnings. Actually, if it starts to flag, that’s a good time to monitor with a Squeeze (actual squeeze with Bollinger bands inside of Keltner channels dots). I will likely take a bite then.

Happy hunting,
Lakedog

PS I’m West Coast so 7 am is the 10 am time for Easteners.

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Yea Lakedog that is a strong stock. Hope you are able to get it at the price you want.

Andy

Agree. IBD folks generally like a big show of strength. In this cash huge volume accompanying a jump above the 50dma. The stock is in a cup with handle base, and I predict the IBD team will call this an early entry. It gapped up at the open, came down then took off, showing strong support for the stock. I suspect I will take a partial position in it today and yes, wait for a flag or consolidation. But, along with the economic news that is pushing the market today, I will predict we will have a three days of up price before it rests.

EDIT: CRWD chart.

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6/6/24: Thursday night, Samsara (IOT) and DocuSign (DOCU) both beat quarterly views and gave roughly in-line guidance. But both software stocks fell sharply overnight. IOT down 6.5% at 7PM.

NU: nice bounce of 50dma in above average vol while markets were below average vol.

MNDY moves above 21dma, but is still below 50dma. Low vol.

NVDA has downside reversal on vol 47% above average. Not what one likes to see.

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TSI hasn’t crossed to confirm the buy signal on IOT NU or MNDY but we all know that. Just stating the obvious…doc

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Right Doc and look at that IOT now. They reported yesterday.

Andy

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IOT is an interesting example of predictive failure.

Yesterday, prices closed above the MA on increased volume as it began to move above a sideways consolidation. In the absence of any other info, that would have been a 'Buy" signal I would have trusted AND WOULD HAVE LOST MONEY FOR DOING SO IF A MARKET ORDER AT OPEN (MOC) HAD BEEN USED. But a Buy-Stop order set to trigger above the previous day’s close would have avoided that.

Gees, getting this trading stuff right is an endless task. OTOH, given that Samara is "currently unprofitable and not forecast to become profitable over the next three years", (per SWS), I wouldn’t have been trying to trade it.

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RE: IOT…

I am certainly not saying to buy IOT, but IBD, who gets their estimates from Factset, shows positive earnings this last report and going forward. What is SWS and do they do their own estimates or consolidate from analysts?

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SWS is SimplyWallStreet, a fundie website I trust.

Here’s their snapshot of IOT.

Here’s SWS’s forecast of IOT’s revenue and earnings.

Andy,

It appears that IBD is depending on bogus info. Here’s what BarChart reports for IOT.

Notice the little minus signs in front of all the earnings numbers, past and future?

Factset uses Adjusted earnings, not something a site that is a value site would use so be aware of that. Also, value investors have been sent to the desert for years where they have been wandering around.

Andy

Yes, I recall Bill O’Neil thinking GAAP earnings were not indicative of the true earnings power of a company, so they use non-GAAP. Saul has also stated he uses non-GAAP as have various talking heads.

A man with two watches does not know the time :wink:

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Pete, It isn’t important whether you use Gaap or non-Gaap. What is important is that you know which one to use based on the investing style you have decided to follow. A growth investor, following the IBD method, would never use Gaap and a value investor would never use Non-Gaap.

Andy

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Andy,

By 'non-GAAP earnings" you mean, of course, the accounting tricks used to spin the facts when they are negative.

No responsible investor uses non-GAAP earnings, no matter their ‘growth’ or ‘value’ orientation. Shysters? Yes, but not serious investors. (IMHO, natch.)

As Investopedia points out,

“Standardized accounting rules are in place for consistency and comparability. Consistent revenue recognition makes reported earnings more reliable for historical comparison, and it allows investors to compare the financial results of one company to that of its industry peers and competitors. That is why the Securities and Exchange Commission (SEC) requires publicly traded companies to use GAAP accounting in the first place.”

Mind you, GAAP rules allow for a great deal of accounting flexibility, probably too much. But they are far better than the abuses, lies, and fraud permitted by non-GAAP trickery. (Again, IMHO, 'natch.)

Charlie

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Charlie the same could be said of anyone using Charts or trying to time the market. At least according to your hero Benjamin Graham. He would never condone the way you invest. (IMHO)

It is a slippery slope when you do not strictly follow an investing method you toit.

Andy