Trade Alert: Earnings, 10/27/2023

One bullish trade.

Today’s Earnings Trade

Recall we are looking at seven different metrics for earnings trades:

• LikeFolio’s earnings score based on social data. The higher the number, the more bullish, the lower (more negative) the number, the more bearish.

• Portfolio Armor’s gauge of options market sentiment.

• Chartmill’s Setup rating. On a scale of 1-10, this is a measure of technical consolidation. For bullish trades, we want a high setup rating; for bearish trades, a lower one.

• Zacks Earnings ESP (Expected Surprise Prediction). This is a ratio of the most accurate analyst’s earnings estimate versus the consensus estimate.

• The Piotroski F-Score. A measure of financial strength on a scale from 0-9, with 9 being best.

• Recent insider transactions.

• RSI (Relative Strength Index). A technical measure of whether a stock is overbought or oversold. We’re looking for RSI levels below 70 for bullish trades and above 30 for bearish ones.

None of these metrics alone are dispositive, but we’ll consider the preponderance of evidence when placing our bets. Based on last week’s results, I had been giving a bit more weighting to Zacks ESP and RSI this week.

The Stock We’re Bullish On

Bullish Stock #1

1. Social data: +74.

2. PA Options sentiment: Bullish.

3. Setup rating: 3

4. Zacks ESP: 57.81%

5. F-Score: 3

6. Recent insider transaction(s): Net open market purchases over the last 12 months, but at lower than current prices.

7. RSI: 30

Details below.

Our Bullish Trade