Hey,
Charles here.
One of our editors just handed me his two picks for the week, and the contrast is chef's kiss. On one side, a beloved athletic wear brand that just crushed earnings and tripped every momentum signal on the Fingerprint Scanner. On the other, a consulting firm limping toward a 52-week low while the market bets AI will eat its lunch. Same scanner, same data, two completely different setups. Let's get into it.
One to Love: I Can See Through This One
I highlighted this stock a few months ago and it's done a full round trip since. With oil prices going to the moon, things made out of oil are getting more expensive. This company is famous for making garments that are there but not quite there.
My Fingerprint Scanner has done a great job finding stocks to buy since the improvements. I expect this to be another winner.
The famous maker of ladies' exercise gear is Lululemon Athletica (LULU). LULU just printed a blockbuster earnings number, and it should jump into the next area on my scanner.
LULU made the start to my favorite pattern: getting whacked before earnings, printing a great number, and now I watch for Institutional Interest to start jumping.
1 YEAR LULU
This Iran conflict has everything connected with rising oil prices getting smoked. Good for oil and gas producers but bad for users of oil-based products. I think this hits $200 or more in short order.
One to Hate: I Have a Consultant for Sale
Stocks close to a 52-week low generally make a 52-week low, and Rithm Capital Corp (RITM) was my stock last week. It dropped eight percent. The credit boogeyman still persists. That problem hangs around as long as oil prices keep squeezing leveraged players.
The stock I have below is in the "AI will hate it" category. That stock is Korn Ferry (KFY). I like any company that sponsors pro golf and I have no problems using their products. But I don't need KFY to help me at Option Pit. Lots of other companies do. Most of the fundamentals look good.
The stock is still doing poorly and approaching a 52-week low. Stocks that disappoint on earnings and sit near 52-week lows tend to get there soon enough. KFY, as shown below, is just under three percent away.
KFY just increased their dividend, so the company has some confidence. That's not translating to the market price.
Even with that announcement, the stock sold off. There's a lot of press saying companies are going to "vibe" their consulting somehow and KFY will get left in the dust. Short term, the trend is too negative.
I expect a 52-week low soon.
To Your Trading Success,
AG
So there you have it.
Hot yoga pants and a consulting/golf sponsor company.
Andrew's likely buying calls on one and watching for another 52-week low on the other.
Two different setups, both built from the same Fingerprint Scanner momentum data.
The real question now: what will the team pick on Monday?
Join the Ticker Highlight Show Premium before Monday at 10:30 AM ET to find out.
See you there,
Charles Delvalle
Managing Editor,
Option Pit