Stock of the day: Garmin
02 August 2023
Before the American session bell rings today, all eyes are on Garmin's eagerly anticipated earnings report. With expectations pegging the EPS at 1.42 and revenue forecasts hovering around the 1.26B mark, traders and analysts are abuzz with anticipation. And while these numbers are crucial, what's equally riveting is the technical positioning of the stock price leading up to this release.
Technically speaking, Garmin's stock price is perched at a precipice, poised for a potential breakout. The chart showcases an intriguing ascending triangle pattern, a formation that often heralds a significant move, either bullish or bearish, once completed. We are at the far end of this pattern, and the culmination could very well be influenced by the impending earnings results.
Digging deeper into the technical structure, two pivotal levels stand out. On the downside, we have the long-standing uptrend line, depicted in black. This has been a dependable support for the stock, and we've witnessed a recent bounce off this line. Conversely, on the upside, there's a formidable resistance around the $108 mark. This level has proven its mettle since mid-2022, staunchly repelling any bullish advances.
So, what could the earnings results mean for the stock? A favorable report, exceeding the market's expectations, could catalyze a bullish breakout, pushing the price past the $108 resistance. On the flip side, underwhelming results could see the price breach the long-standing black uptrend line, signaling bearish intent.
However, it's not all gloom and doom for the bears. Even if the price does break the black line, there's another safety net in the form of a horizontal support at $101, illustrated in yellow. A breach of both the black and yellow supports would necessitate a rather dismal earnings report.