Earnings season began this week with over 95 companies reporting their most recent earnings reports. By all accounts, it's been quite a positive season so far, with most companies coming in ahead of estimates and the markets responding warmly.
One of the biggest winners has been a small-cap global provider of water flow measurement and control systems that was founded in 1905. The company is Badger Meter (BMI) and, in addition to allowing individuals to view and manage their water usage, the company helps municipalities as well as commercial and industrial clients do the same.
BMI reported strong earnings and sales due to continued interest in their new technology solutions, as well as strong interest in the municipal markets. The stock gapped up over 10% on the positive news and, while the stock looks extended on a daily chart, the intraday chart below suggests more near-term upside.
60-MINUTE CHART OF BADGER METER INC. (BMI)
As you can see, while the RSI is positive, it's not in an overbought position. The MACD has turned positive, but is not out of reach as well. In addition, the last hour's move higher was on impressive volume, which can be bullish. As we all know, trees do not grow to the sky, so I've marked up the signals of an uptrend reversal that took place in mid-September as a guide for when to exit.
There were lots of additional surprises with earnings this week, which I'll be covering in a special webinar with Tom Bowley, Chief Market Strategist of EarningsBeats.com this morning. If you use this link here, you can register for the 9:00am (Eastern Time) event. In case you can't make it live, we'll be sure to send you the recording.
Warmly,
Mary Ellen McGonagle,
