Grab a Bourbon and Get Ready For Beam Earnings
- Posted by Greg Harmon
- on November 1st, 2012
Beam, $BEAM, reports their earnings before the open Friday morning. Open Interest on the options favor a move to the upside but frankly the options are too illiquid to trade. And even if they were liquid the chart below shows a rounded top meeting support ahead of the number. The momentum indicators are mixed with the Relative Strength Index (RSI) bearish and the Moving
Average Convergence Divergence indicator (MACD) negative but improving. A negative reaction taking the stock lower finds support at 53.60 and 52.50, but also confirms the bearish bias going forward. More downside from there. A move over the the 200 day Simple Moving Average (SMA) at 58.06 turns the mood bullish and sees resistance higher at 59.80 and 61.40. Be prepared for either. But their are also secondary plays to be made. Both the charts of Constellation Brands, $STX and Diageo, $DEO, are also consolidating at key points. Diageo is pressing against a double
top at 117 and is your go to play if Beam beats expectations. Consolidating in the blue box, a break out over the top has a Measured Move to 121.40, and it has support from the MACD crossing to positive and the bullish and rising RSI. It is a great breakout candidate with the Beam earnings catalyst. Constellation Brands jumped from the blue box into consolidation in the green box. It too could move higher on a good report from Beam and over 37 has a Measured Move to 40. But with
Constellation Brands, $STZ
the RSI not quite as strong as in Diageo and the MACD negative, this is the go to name if Beam disappoints as a downside sympathy play. A break under 35 finds support at 33.90 and then the bottom of the previous box at 32. Now, where is that drink?
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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