Earnings season has come and (mostly) gone, with all of the major companies reporting Q4 numbers. The consensus is that, overall, earnings were strong, as witnessed by record levels in the market. But there were also companies that came up short that had charts showing warning signs, one of them being Health Management Systems, Inc. (HMSY), which got slammed when they reported their numbers the end of last week.
The warning signs were clear, with the stock heading down non-stop while the rest of the market was riding high. There was nothing on the chart saying "buy me" going into the earnings report.
On the flip side of the scale was Enphase Energy, Inc. (ENPH). Just look at the chart, which shows the stock was going along for the ride with the rest of the market just ahead of its report. And talk about Relative Strength!
Generally, we avoid getting involved in stocks ahead of earnings reports. However, we know there are a lot of traders who like the opportunity to participate in stocks just before they report. In fact, we've started a new feature at EarningsBeats.com where we'll be looking at companies about to report (the day before) and will provide members with those that look solid on a relative basis heading into earnings. In other words, looking for stocks like ENPH that could be setting up for a nice move higher once they report. This will be a members-only feature, so if you aren't already an EarningsBeats.com member, just click here and you can sign up for a 30-day trial for NO COST.
At your service,
John Hopkins
