This Stock Is Ready To Drop Post Earnings

alert

While they don't always give you a 100% indication of where a stock will head after an earnings report, they can be quite helpful in making a trading decision. Last week with $CSCO up against the $26 level I used a long term chart to determine that the odds of a sharp decline post earnings. $CSCO dropped almost 10% and, in my view, looks ready to drop even further.

After the bell on Thursday $ARO Aeropostale Inc, reports earnings. I think the stock will plummet on this report and find support around $10 when the selling is done. I don't think the drop to $10 will come in one trading day, although it might, rather I think the move to $10.50 is not out of the question.

The stock has been putting in lower highs since topping in 2010. Its recent bout of consolidation has finally concluded with the stock breaking lower. I think the next stop is multi-year support at $10 and that tomorrows earnings report will be what helps take it there.

aro1

aro2

Profile photo of uranium-pinto-beansKnown to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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