The market has shown incredible resiliency lately, shaking off the coronavirus epidemic, any negative economic reports, an impeachment trial and other developments that one would think could derail stocks. Yet here we are, with the market near record highs with traders seeming to "care less" about anything but the one thing that matters the most: corporate earnings.
In some ways, the overall market attitude seems somewhat cavalier. But the fact is that, above all else, it's the bottom line that determines whether or not traders become attracted to a stock.
As an example, look at the chart below on IBM, which powered higher on strong earnings.
That powerhouse move higher came as a result of IBM exceeding expectations, fueled by a heavy increase in volume on the buy side. In other words, everyone wanted a piece of a stock that produced strong earnings.
If you asked me if I would chase IBM after that move higher, I would say absolutely not. It was a terrific response, but the stock has become overbought and it now makes sense to wait for the excitement to settle down. But you can bet that traders will be looking to get involved in the stock when it pulls back to a more reasonable level, as everyone likes to be involved in stocks that are winners.
In fact, we'll be conducting a webinar this Monday, February 10, at 4:30pm ET. That webinar will be a sneak preview for our upcoming "Top 10 Stock Picks" webinar that will take place on Wednesday, February 19, where EarningsBeats.com Chief Market Strategist Tom Bowley will release his Top 10 Stock Picks in four different portfolios: Model, Aggressive, Income and Character Change. Monday's FREE webinar is open to all members of the EarningsBeats.com community, including those who currently get our free EarningsBeats Digest that focuses on earnings related information. If you are NOT currently a subscriber, just click here to sign up and we'll send you room instructions and a reminder prior to the start of the webinar. You can also use this link to join us on Monday and the room will open at 4pm ET. Hope to see all of you there!
At your service,
John Hopkins
