Three Charts Worth Viewing
Zacks Investment Research | Sep 23, 2013 01:49PM ET
I like to combine technical and fundamental analysis when trading. The stocks reviewed below are Zacks Rank #1 (Strong Buy) and have favorable technical set ups. These stocks offer an investor the opportunity to marry upward earnings estimate revisions and a favorable looking technical catalyst for profit. Let’s quickly look at three names and their daily bar charts for trading ideas:
Chart #1: Cardtronics (RGR ) had been trading in a range since the spring of 2012, but recently broke out higher to new highs. The rally over the sideways pattern seems to imply a new leg higher and could set the stage for a move into the $70 area.
The company is coming off of a $0.45/share or 38% earnings per share surprise in the quarter ending June. The twist with RGR rests in the expectation for 2014 earnings per share to decelerate from $5.15 to $3.50. Arms sales have been hot, and are expected to slow. The fundamental growth story seems to be uncertain despite the Zacks Rank and strong earnings surprise in the last quarter.
Bottom Line
The markets will be trying to navigate the events in Washington in the coming days with the debt ceiling and government funding for the new fiscal year in the spot light. However, stocks with rising earnings estimate revisions and strong technical set ups may provide a way to weather the Washington storm. CATM, MCRI, and RGR offer a way to marry favorable technical and fundamental dynamics.
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