I am for the most part a technician and use an indicator system
of my own design, Maverick Trading System, which several members
on SI are familiar with. I am of the opinion that the price
movement in Ascend after Thursday will be determined by both
the actual earnings report and the following conference call.
While I have no facts or concrete evidence to support this
claim, I believe that earnings will come in at 0.20 or higher.
The only "reasoning" I am using to arrive at this point is
that of credibility, and the desire of management to maintain
and improve upon it. It is for this reason that I could not
imagine management pre-announcing earnings in the 0.18-0.20
range, and then coming in below...this would literally destroy
any remaining credibility. Again, no real evidence for my
call on earnings at 0.20 or above.
Now onto the technical side, which I know more about. The
technical pattern from 9/1-present very closely resembles
that from the period 4/8-4/25 (of this year). What we see is
a new interim low being put in (at 32 1/8), and then a bounce,
followed by a downward move breaking below the previous low of
32 1/8, and then a bounce back up above 32 1/8...and now testing
support at 32 1/8. During the period 4/8-4/25, the support
being tested was 40. Further, the indicator pattern is also
very similar, indicating a bullish deivergence.
It is important for 32-32 1/8 support to hold until earnings
on Thursday, and if the earnings and conference call are favorable,
then and bounce back up will occur. There will be resistance
on the daily 20SMA at ~35 1/2. Resistance on the daily 20SMA
has held since breaking below it in early August. Breaking
above 35 1/2 on a closing basis on strong volume should be
followed by a test of the 38 1/2-40 area.
I am recommending a sell at 35 for those who purchased below 35,
and close to this point. After selling shares, I would sell the
35 put for December or so. |
