By Harry Boxer
Here are four companies whose stock charts are powering higher after positive earnings announcements.
Energy Recovery Inc. /zigman2/quotes/204707248/composite ERII +1.13% is looking strong after a breakout on big volume and a 14% price gain Monday. The stock pulled back slightly on Tuesday but remained above a key lateral resistance level going back to late April. The stock appears to have completed a head-and-shoulders bottoming pattern, after a long decline from just under $16 in September 2016 to just above $6 this past August. A week ago the maker of energy-recovery devices reported third-quarter profits that beat Wall Street’s forecasts, and has rallied 22% since then. Next targets: $10.75 and $12. Short interest of about 21 times its average volume could fuel the move as short-sellers cover their positions on a rally.
Health Insurance Innovations Inc. broke out above a key resistance level on Tuesday, up $1.50, or 6.7%, closing at $23.70. The move above the $23 resistance level, which came on light volume of 945,700 shares, saw price cross over to the positive side of the 50-day moving average for the first time in two months. The stock is bouncing back from a steep decline in September, and has been climbing in a rising wedge pattern since its bottom at $12.65 on Sept. 28. A week ago, the Web-based health-coverage provider topped Wall Street’s expectations in its earnings report. Next targets: $27.75 and $33.
Nektar Therapeutics /zigman2/quotes/206715615/composite NKTR -4.65% popped 10.5%, or $2.56, on Tuesday, closing at $26.84 on heavy volume of over 2.7 million shares traded. The stock’s elevated volume, the highest since late July, came as the market anticipated the company’s earnings announcement after the market close Tuesday. In fact, the announcement topped Wall Street’s third-quarter forecasts, and the stock is rallying today. It has now risen to the top of a six-year rising price channel, and a breakout through the channel ceiling may cause price to accelerate into the mid-$30s. Short interest of about 12 times its average volume could fuel the move as short-sellers cover on a rally.
U.S. Silica Holdings Inc. /zigman2/quotes/206361964/composite SLCA -0.64% rallied 9.6% to close at $34.55 Tuesday on volume of 6.6 million shares, nearly three times its average daily volume. With a positive earnings surprise announced by the fracking-sand supplier Monday, the stock opened Tuesday with a breakaway gap up that was $1.97 above Monday’s close. The stock is rebounding from a 58% loss in value that occurred between February and mid-August, when it reached a low of $24.26. Next targets: $38 and $42.
See Harry’s video-chart analysis on these stocks.
The writer has no holdings in any of the securities mentioned.
Harry Boxer is founder of TheTechTrader.com, a live trading room featuring his stock picks, technical market analysis and live chart presentations.