5 Hated Stocks Poised to Pop on Earnings
From a technical perspective, ARUN is currently trading above its 50-day moving average and below its 200-day moving average, which is neutral trendwise. This stock recently broke out topside of a sideways trading pattern that saw the stock trend between $12.30 and $15.40 a share. Following that breakout, shares of ARUN have run up to its current price of around $17.40 a share. That move has now pushed ARUN within range of triggering another breakout trade post-earnings.
If you're in the bull camp on ARUN, then I would wait until after it reports earnings and look for long-biased trades if it breaks out above some near-term overhead resistance at $17.74 a share, and if it takes out its 200-day moving average of $18.94 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 3,405,610 shares. If we get that move, then ARUN will have a great chance of re-testing and possibly taking out its next significant overhead resistance levels at $21.70 to $22.38 a share.
I would simply avoid ARUN or look for short-biased trades if after earnings this stock fails to trigger that breakout, and then takes out some near-term support at $16 a share with heavy volume. If we get that action, then look for ARUN to re-test and possibly take out its 50-day moving average of $14.65 a share post-earnings.