Have we got a treat for you today.
We’re going to deep dive into storylines and charts of three stocks with surging interest.
Plus, we’ll lay out our hot take on what this means for traders and investors.
Over the weekend, our TrackstarIQ data highlighted the following three companies :
- Sherwin Williams (SHW)
- Micron (MU)
- Boston Beer Company (SAM)
So, why is interest surging in these three companies?
We looked at the fundamentals and chart technicals of these three stocks.
And the results were fascinating.
Sherwin Williams (SHW)
April 27th is earnings day for Sherwin Williams.
Outside of that fact, there is no news surrounding the company.
Zilch – Nada.
Yet, interest in the company surged to start April past levels seen in the last two months.
What’s really unusual is the surge of interest occurred for both retail and institutional advisors.
Now, this could be a precursor to earnings. However, it’s unusual to see this high level of interest more than a few days out.
For now, we want to highlight this as you might have unusual options activity.
But before we move on, let’s take a quick look at the daily chart of SHW.
From a technical standpoint, this is a bullish chart.
There are three reasons why.
First, shares managed to recently clear the old highs from early November. That shows buyer interest even at these lofty prices.
Second, shares bounced off the 8-period exponential moving average (EMA). This moving average (noted by the red line) is weighted more towards recent price movements, and traders often use it as support.
Lastly, that same spot where shares bounced off the 8-EMA is also a support area – $245 (highlighted by the solid blue line)
Traders look for spots where the stock tends to find resistance and support. You can see how shares struggled to work above that level in December. Now, they are comfortably above that price.
Our take – This stock could be poised for a run higher into the earnings date. If the overall market remains buoyant, we could see shares of SHW outperform.
Seeing Micron on this list isn’t entirely surprising.
Semiconductors are all over the news these days.
Globally, there’s a massive shortage of chips, slowing production on everything from cars to computers.
That’s why the surge in pages viewed and searches monitored by TrackstsrIQ for Micron isn’t as prominent as Sherwin Williams but is still noteworthy.
Now, part of the increased interest comes from their recent earnings release on the 31st.
The company managed to deliver Q2 revenue that was up 30% on the year with earnings that topped estimates by $0.03.
Unsurprisingly, markets liked what they heard, sending shares up 4.76% on the day.
From a fundamental perspective, the stock is doing fantastic.
Looking at the technicals, the stock faces a near-term challenge.
And you don’t need a chart to understand this one.
The all-time high for the stock is $95.75, set back in early March.
Shares currently trade just below that.
That price is a strong resistance where long traders are likely to take profits and short-sellers initiate new positions.
Once price starts closing daily and then weekly above that price, we know enough buying demand exists to keep shares up at these new levels.
Our take – There’s no doubt Micron’s business is set for success. All it needs is a boost above these current price levels.
Boston Beer Company (SAM)
Similar to SHW, SAM doesn’t have any notable news events surrounding the company.
Other than they make a damn fine seasonal beer.
Unlike SHW, TrackstsrIQ displayed a split between retail and institutional advisor interest levels.
SAM hit a new all-time high on the 31st, which could have led to this surge.
What is interesting here is the daily chart of the stock.
There are three key elements to point out here.
First is the all-time high we discussed earlier. Shares poked up to $1,250 but ended up closing near the lows of the day. Not a particularly bullish move.
However, we can also see that the stock continues to trade above the 8-period Exponential Moving Average (EMA).
But one of the more fascinating elements is the series of higher lows.
When you look at the orange trendline that connects the candlesticks’ bottom, you can see how it points up and to the right.
That tells us the trend is bullish. We know this because buyers keep stepping in earlier and earlier when the stock sells off.
Our take – Shares could try for a run into earnings. However, this is a tough spot for traders. Shares could easily drop back down as low as $900-$1000 or could run up another $200 from here. If you like the company for the long-haul, pick your spots and stick with them. Let the stock come to you.