I believe it is important to know at what levels a stock reports its earnings because that is when you KNOW everyone interested in a stock is watching, analyzing and adjusting their position. It is the "buy/sell/hold" day for a stock and quite often the level is an important "market memory" level for a long time after, even up to a year or more later the stock can react to previous levels.
Along with "KEY EARNINGS LEVELS" - you can look at my proprietary "trend" indicator called "RgMov" at the bottom (the black line) and the way I use it is to look for 2-month (44-days) moves to new highs or new lows to tell me the trend. If RgMov has hit a 2-month high, then I want to buy oversold dips in the 11-day CCI (1/4th the time of the trend). If RgMov has hit a 2-month low, then I want to sell overbought ralies in the 11-day CCI. Currently, CCI has not reached overbought at +100 (currently only still -24), so there is no signal now to short.
However, ABMD has overhead supply coming from 3 key observations that may prevent the stock from reaching overbought. Look at the volume on the right side of the chart = and look for the areas where very little volume has traded around the $81 level and the $86 level. Those are low volume because buyers USED-TO be at that price buying the stock, but now they aren't because the price is below that level. The 3rd key supply level is where ABMD reported earnings last week which is the green triangle has it's midpoint near the $84 level. Look back and see how the stock reacts to this level and see for yourself that sellers are lingering around at this level to unload more shares.
IF NO REACTION to the sell signals I am outlining here then I'll get bullish. If ABMD can get over $96 and sustain that price advance, then AMBD will be accumulated again. As it is now, ABMD just experienced a blow-off rally ahead of earnings and its exciting growth in revenues. Investors have bid up the stock to well over 10 times the current revenues and time will be needed to allow the fundamentals to catch up to the price. That's how markets work, they anticipate news. So, quite often, they overreact or react too soon and do both sometimes. The second case is more likely to be the situation here.
Note the 3-sell signal levels here in AMBD.
8:20AM EST November 4, 2015 79.82 close yesterday
Along with "KEY EARNINGS LEVELS" - you can look at my proprietary "trend" indicator called "RgMov" at the bottom (the black line) and the way I use it is to look for 2-month (44-days) moves to new highs or new lows to tell me the trend. If RgMov has hit a 2-month high, then I want to buy oversold dips in the 11-day CCI (1/4th the time of the trend). If RgMov has hit a 2-month low, then I want to sell overbought ralies in the 11-day CCI. Currently, CCI has not reached overbought at +100 (currently only still -24), so there is no signal now to short.
However, ABMD has overhead supply coming from 3 key observations that may prevent the stock from reaching overbought. Look at the volume on the right side of the chart = and look for the areas where very little volume has traded around the $81 level and the $86 level. Those are low volume because buyers USED-TO be at that price buying the stock, but now they aren't because the price is below that level. The 3rd key supply level is where ABMD reported earnings last week which is the green triangle has it's midpoint near the $84 level. Look back and see how the stock reacts to this level and see for yourself that sellers are lingering around at this level to unload more shares.
IF NO REACTION to the sell signals I am outlining here then I'll get bullish. If ABMD can get over $96 and sustain that price advance, then AMBD will be accumulated again. As it is now, ABMD just experienced a blow-off rally ahead of earnings and its exciting growth in revenues. Investors have bid up the stock to well over 10 times the current revenues and time will be needed to allow the fundamentals to catch up to the price. That's how markets work, they anticipate news. So, quite often, they overreact or react too soon and do both sometimes. The second case is more likely to be the situation here.
Note the 3-sell signal levels here in AMBD.
8:20AM EST November 4, 2015 79.82 close yesterday
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