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The Portfolio Armor Substack
The Portfolio Armor Substack
Trade Alert: Earnings, 10/30/2023

Trade Alert: Earnings, 10/30/2023

Incorporating a lesson from last week; two bullish and two bearish trades.

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Portfolio Armor
Oct 30, 2023
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The Portfolio Armor Substack
The Portfolio Armor Substack
Trade Alert: Earnings, 10/30/2023
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A Lesson From Last Week

Recall that we have been looking at eight 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.

  • Short Interest (noted when 10% or higher).

Last week, the most accurate of these metrics was Portfolio Armor’s options market sentiment, as we suggested in our Exits post on Friday.

Exits, 10/28/2023

Portfolio Armor
·
October 28, 2023
Exits, 10/28/2023

Dids/Pexels This Week’s Trade Exits As soon as I exit a trade, I note that in the comments of the post where I first mentioned the trade; at the end of the week, I try to track them all in one post. These are the trades I this week:The Portfolio Armor Substack is a reader-supported publication. To receive new posts and support my work, consider becoming a…

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We placed a bullish trade where we ignored bearish options market sentiment on the stock in favor of other, bullish metrics, and that one didn’t work out. We won’t be doing that again this week. Let’s look at today’s bullish and bearish names and how they stack up on our seven or eight (if short interest is high) metrics.

The Stocks We’re Bullish On

Bullish Stock #1

  1. Social data: +42.

  2. PA Options sentiment: Neutral.

  3. Setup rating: 8

  4. Zacks ESP: 11.77%

  5. F-Score: 7

  6. Recent insider transaction(s): Relatively small open market sales over the past year, at significantly higher than current prices.

  7. RSI: 46

Bullish Stock #2

  1. Social data: +23.

  2. PA Options sentiment: Bullish.

  3. Setup rating: 1

  4. Zacks ESP: -1.77%, but this is also a #1 ranked Zacks stock.

  5. F-Score: 5

  6. Recent insider transaction(s): Open market sales, larger earlier in the year.

  7. RSI: 33

Bearish Stock #1

  1. Social data: -27.

  2. PA Options sentiment: Neutral.

  3. Setup rating: 6

  4. Zacks ESP: -1.45%

  5. F-Score: 6

  6. Recent insider transaction(s): None in the last 12 months

  7. RSI: 40

Bearish Stock #2

  1. Social data: -33.

  2. PA Options sentiment: Very Bearish.

  3. Setup rating: 8

  4. Zacks ESP: -7.86%

  5. F-Score: 4

  6. Recent insider transaction(s): Open market sales.

  7. RSI: 42

  8. Short Interest: 19%

Details below.

Bullish Trade #1

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