It is not uncommon for a company to see a huge uptrend followed by a long period of consolidation. Many traders with short-term time periods will become increasingly impatient and will sell long before they do so. But properly employed capital is vital for a trader, so it makes sense to wait for the dam to break and then ride the bullish wave. One of the best groups in the industry in this secular bull market has been semiconductors ($ DJUSSC), so it’s worth seeing such a consolidated stock.
Enter Entegris, Inc. (ENTG), which crushed quarterly revenue estimates on July 27 of $ 571.4 million vs. $ 537.6. His EPS also surpassed Wall Street’s best assumptions, $ 0.85 vs. $ 0.80. After posting these better-than-expected figures, they offered guidelines that exceeded Wall Street estimates in both revenue and EPS. Here is the current technical image of ENTG:
So what happened? Why didn’t ENTG come out with such positive news and an improved outlook? Well, just as ENTG reached key price resistance (point C of the upper ascending triangle pattern), the DJUSSC fell for 6 days in a row. The money came out of the group. It was just not the time. However, it is very possible that Friday’s bullish sinking candle marked the final close (point D) before the ENT climbed to make that break. The most exciting part is that the upward triangle pattern of ENTG measures (distance from point A to point B) up to $ 25 above its breakout level of 126, or 151. From the current level of 116, which represents approximately 30% rise depending on the price of the target break.
Semiconductors are a group in which you generally want to have representation, especially during a secular bullish market. But is ENTG the best stock in the group? What are the others? I will answer these and other questions during my webinar “Preview: The Top 10 Actions” Monday at 4:30 pm ET. The idea of this webinar is to discuss our strategy for selecting the 10 equally weighted stocks in each of our portfolios. Our flagship model portfolio has gained 226% from its inception on August 19, 2018 until the close on Friday. In perspective, the S&P 500 gained 66% in the same period of time. It’s important to invest in leading stocks in industry leading groups and I’ll explain how we do that at EarningsBeats.com. It’s a FREE forT event for the entire EarningsBeats.com community, which includes our free subscribers to EB Digest. CLICK HERE to enter your name and email address in the areas provided to subscribe to our EB Digest, which will reserve your place for Monday’s event.