And in this Corner….Tale of the Tape ahead of MSG Earnings

• Posted by Greg Harmon
• on November 3rd, 2011

It may not be as entertaining as Ali-Frazier II held there but Madison Square Garden, $MSG, will be reporting earnings in the morning before the market opens. That fight ended in a unanimous decision in what many think was an insignificant fight. Certainly not like the ‘Thrilla in Manilla’. Will this Main Event be insignificant or will it be a knock out? Let’s see what the charts are predicting.

The weekly chart above shows a steady rise off of the Hammer reversal candle printed the week of October 3. Now back into the area it consolidated in before the August pullback it has some bullish indicators. The Relative Strength Index is rising and near the 60 level, turning bullish, while the Moving Average Convergence Divergence (MACD) indicator crossed positive continuing the trend higher from mid August. It is now also above the 20 and 50 week Simple Moving Averages (SMA). Consolidation can be expected at this level but it looks bullish from this timeframe going into earnings.

Zooming in to the daily chart shows a gap higher last week was closed and it is now back to the gap up highs. The consolidated grouping of candles could be interpreted as a bull flag as well, between 26 and 27. The RSI is solidly in bullish territory but the MACD is fading a bit, not untypical of a flag where the shorter Exponential Moving Average (EMA) making up the MACD indicator loses a slope more quickly, so not a big issue. It is above all of the SMA’s, and has the 50 day SMA now rising. This timeframe also sets up bullish going into earnings. Watch for knock out earnings to lead to a break out of the flag and test of the previous highs at 30, near the Measured Move (MM) at 30.50.

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