Getting Made Up for Estee Lauder Earnings

• Posted by Greg Harmon
• on November 2nd, 2011

Estee Lauder, $EL, reports earnings Thursday morning before the open. The short term picture for an earnings trade looks a bit unclear. But backing out and viewing the bigger picture it does look like an opportunity to the upside. Let me explain.

The daily chart shows a rising trend that stalled at 102 and fell back to the confluence of the 50 and 200 day Simple Moving Averages (SMA) and is now bouncing. Notice also that the 50 day SMA is likely to cross up through the

200 day SMA again shortly. In fact all of the SMA’s are starting to rise again. The Relative Strength Index (RSI) is trying to break 60 while the MACD is fading lower. There is support at 95 and then 92.50, 87.50 and 85 lower and resistance higher at 102.50 and 107.50. Pulling out to the weekly chart shows the significance of support at the rising 50 week SMA. The RSI on this timeframe has

remained bullish since prior to November 2009 and the MACD is about to cross bullishly positive, with price above all of the SMA which are sloping higher. Definitely bullish from this perspective. Finally the monthly chart paints a very bullish picture and is what leads me suggesting this trade instead of on that would move solely for earnings. The pullback from the last move higher is nearly retraced giving it opportunity to move higher but it might take a little time.

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