Fastenal Company (NASDAQ:FAST) reports earnings before the stock market opens on Tuesday July 12th, 2016.. Analysts expect $0.49 earnings per share on $1.02 billion in revenue. So what will the stock do? For that we look at the stock chart.
Initial analysis reveals that the stock has rallied $42.20 on June 27th to close today at $45.36. Most average investors would view this in a bullish light but smart traders understand that the recent gains can take some power out of a good earnings announcement. This sharp recent rally places a negative indicator on Fastenal.
Continued chart analysis reveals a potential breakout. If you connect the highs of March 21st, April 28th, June 3rd, June 23rd and July 1st you will see a perfect trend line. Notice how the close today, prior to earnings was above that level. This means there is a potential breakout in the stock which is very bullish going into earnings.
Lastly, the weekly chart showcases a bullish chart formation. This is a bullish signal for earnings performance as well.When you put all three factors together, you get a neutral to positive rating for the stock going into earnings. This means that odds slightly favor continued upside on the earnings announement.
This article was originally posted on Verified Investing.
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