July 14, 2019

"Pattern setups for base breakout plays have been in short supply for the past few weeks, and this has been noted in these reports and in the premium videos and Focus List. In addition, of those coming out of bases, fewer have shown good volume and convincing follow-through."

The above was written in Wednesday's report. The situation remains the same. Our swing setups continue to wear the pants during this period, while breakout candidates do not show the power and volume we would normally expect.

This is a good time to be cognizant of how it is not always desirable to buy breakouts simply because the Nasdaq Composite is in a solid uptrend. Let's continue to bide our time until we see evidence of breakouts working. In the meantime, we will maintain a diligent approach as to uncovering swing setups that can be used for either swing trades or entries into position trades.

Among the names, Amazon.com (AMZN) is expected to put up earnings growth of 36%/40% in ‘19/’20. Sales increased 20% and 17% in the two recent quarters. An 84 RS stock in an 80 RS group with a B- acc/dist rating.

Price broke out of a handle on Tuesday with +10% volume and +1.8% price increase. The next day price rose 1.5% on +24% volume. The disappointing price/volume is par for the course among most breakouts.

AMZN can be taken around Friday’s closing level of 2,011.00 since price is 2% above the pivot, and is thus not materially extended. The stock is not expected to be a big leader based on the overall sluggishness of other liquid glamours. Earnings expected July 25 (confirmed).

ACI Worldwide (ACIW) shows expected earnings growth of -28%/46% for ‘19/’20. However, sales dipped 2% in each of the last two quarters. An 89 RS stock in a 93 RS group with a B- acc/dist rating.

Price forms a 10-week cup-with-handle base and can be taken above the handle high of 35.22. It is to be noted, however, that ACIW is not a bona fide growth stock due to its soggy recent sales growth plus its annual earnings growth over the past half-dozen years. Thus, its leadership potential may be limited. Earnings expected July 25 (confirmed).

Beyond Meat (BYND) is expected to show a per-share loss of 27 cents in ’19, followed by a 5-cent profit in ’20. Sales have ballooned by triple-digits over the past seven quarters. A 99 RS stock in a 99 RS group with an A+ acc/dist rating.

The stock acts very well. It will be monitored for a swing trader setup in coming sessions. Expected earnings date is unclear.

Dexcom (DXCM) shows hefty earnings growth estimates of 138%/58% for ‘19/’20. Revenue growth has been big, at 53% and 52% in the recent two quarters. A 92 RS stock in an 89 RS group with a B acc/dist rating.

Price forms a four-month cup. The key day was 6/10, when price jumped 9.9% on +257% volume to clear a bottoming formation. DXCM can be taken above the 157.50 high of June 20. Earnings expected July 31 (confirmed).

Elastic (ESTC) is forecast to post losses this year and next. Revenue swelled 70% and 63% in the last two quarters. A 93 RS stock in a 92 RS group with a B+ acc/dist rating.

ESTC has shown power for four-straight days as it moves up the right side of its 28% deep cup. While not providing attractive entrance at present, this will be monitored for a cheater entrance over the next week. Earnings expected Sept. 4 (unconfirmed).

Splunk (SPLK) is predicted to log 36%/30% earnings growth in the January ‘20/’21 fiscal years. Revenue has grown steadily by 35% and 36% in the recent two quarters. An 87 RS stock in a 92 RS group with a C acc/dist rating.

Price builds a four-month consolidation. It has moved up 27% in the last six weeks. Rather than take this on a break of the pattern high, it is preferred to wait until a handle or sideways movement occurs. Earnings expected Aug. 22 (unconfirmed).

In sum, it is important at this juncture to recognize that, from a breakout point of view, price/volume is not aligning for maximum performance. Let's continue to bide our time as we await a pick-up in the speculative sentiment among large investors. Until then, we hope to capitalize on any swing setups that develop.

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Unless otherwise noted, charts created using TradeStation. ©TradeStation Technologies, 2001-2019. All rights reserved.

The views contained herein represent those of Marder Investment Advisors Corp. At the time of this writing, of the stocks mentioned in this report, Marder Investment Advisors Corp., Kevin Marder, or an affiliate thereof held a position in BYND, though positions are subject to change at any time and without notice. Estimate data provided by Thomson Reuters. Expected earnings release dates provided by EarningsWhispers.