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The Portfolio Armor Substack
The Portfolio Armor Substack
Trade Alert: Earnings, 9/18/2023

Trade Alert: Earnings, 9/18/2023

A bullish bet on a company reporting before tomorrow's open.

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Portfolio Armor
Sep 18, 2023
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The Portfolio Armor Substack
The Portfolio Armor Substack
Trade Alert: Earnings, 9/18/2023
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Getting Back To Earnings Trades

Last week, I didn’t see any attractive earnings trades. Partly, that was a result of declining volume, as we’re getting toward the end of Q2 earnings season. This week, there are a few that look interesting.

Remember the metrics we’re using when selecting these 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.

Another metric I keep an eye on but don’t post all the time is short interest. If short interest is in the mid-to-high teens or higher, I’ll note it here.

Our Bullish Stock

Here’s how today’s first retailer stacks up on our seven metrics:

  1. Social data: +51.

  2. PA Options sentiment: Bullish.

  3. Setup rating: 7

  4. Zacks ESP: 2.88%

  5. F-Score: 6

  6. Recent insider transaction(s): net open market sales in June and July.

  7. RSI: 50

Details below.

Today’s Bullish Trade

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