BUY to SMITH A O CORPHey people, SMITH A O CORP is in a bearish fake dynamic with bearish continuation and more buying and selling volume. In TIMEFRAME 5 1Min we see a bull line, which means that there is no decision. But the tendency remains buying, it will break its VWAP with force and break through the stabilization zone. Strong potential to join the last previous high but there is a bullish gap to fill. We can arrive on the bottom of the fence of this one, which is a strong support See the TIMEFRAME 4H.
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3SM trade ideas
A.O. Smith; awaiting Q1 EPS results to enter a long positionA.O. Smith corp. has a history of stable EPS growth; however, the Corona lockdown is likely to affect the EPS in 2020 and maybe the consecutive year’s expected growth. In FY 2009, the company traded at a P/E ratio of 13 in average. Taking a very pessimistic perspective, one could argue that the economy will experience a recession similar to the one in 2008, that the P/E ratio will fall as the future growth perspectives turn negative. At the same time yearly EPS fall to $1.7, which would justify the stock price falling to $1.7*13 = $22.1. Shortly after the recession as future prospects get better and the company is able to generate higher EPS, we could expect both annual EPS and P/E ratio to recover and the share price to bounce back to $2.6*19 = 49.4$. This is an extreme perspective and a more realistic movement of the share price could be: share price falling to $1.5*19 = $28.5 (within April 2020) and bouncing back to $2.23*19 = 42,3 $ by the end of 2021.
Buying idea
Option 1 Option 2
Entry price $28.5 $22.5
Take profit $42.75 $49.5
Max expected holding period 18-months 18-months
Profit 50% 220%
I`ll buy the stock as soon as it hits $28.5. Good luck!
Swing: AOS ~11% upsideAOS
AOS Technical Signals
MACD: Bullish crossing on 2/16/2018 at -.06
Moving Averages: 50 MA crosses under price with volume on 2/14 giving a short term bull signal, 20MA also crossing under price on 2/15.
RSI (14): Sitting at 56.46 and trending upwards, showing bullish momentum.
Bouncing off a strong support at 60
First Target: 70.80
Second Target 72.50
Stop: 60.00
AOS - H&S formation short from $$66.16 to $53.35AOS is running within a channel formation & now challenging its channel resistance. It also seems shaping a H&S formation. We think it has good downside potential from current level.
To Play this we would consider $65 July puts ($2.95)
* Trade Criteria *
Date First Found- February 22, 2018
Pattern/Why- Upward channel; H&S formation
Entry Criteria- From current price ($66.16) (Hit February 23, 2018)
Exit Criteria- $53.35
Stop Loss Criteria- $68.67
Indicator Notes- Twiggs money flow heading to the negative side.
Special Note- Quite a lot of insider selling. Sizable insider selling in early February
We would consider $65 July puts ($2.95)
Please check back for Trade updates. (Note: Trade update is little delayed here.)
AOS - H&S formation short from $$66.16 to $53.35 AOS is running within a channel formation & now challenging its channel resistance. It also seems shaping a H&S formation. We think it has good downside potential from current level.
To Play this we would consider $65 July puts ($2.95)
* Trade Criteria *
Date First Found- February 22, 2018
Pattern/Why- Upward channel; H&S formation
Entry Criteria- From current price ($66.16) (Hit February 23, 2018)
Exit Criteria- $53.35
Stop Loss Criteria- $68.67
Indicator Notes- Twiggs money flow heading to the negative side.
Special Note- Quite a lot of insider selling. Sizable insider selling in early February
We would consider $65 July puts ($2.95)
Please check back for Trade updates. (Note: Trade update is little delayed here.)