Combining Technical Analysis with Strong Fundamentals for Identifying Future-Performing Stocks!

In the world of trading, the debate between Technical Analysis and Fundamental Analysis has been ongoing, often clouded by biases.

In the world of trading, the debate between Technical Analysis and Fundamental Analysis has been ongoing, often clouded by biases. Today, we invite you to explore a balanced approach that marries the best of both worlds. In this newsletter, we present a strategy that combines the precision of chart analysis with the strength of fundamentals, introducing you to the fascinating realm of Power Earnings Gaps (PEG) plays.

As the saying goes, it's not Technicals or Fundamentals that are wrong; it's the analysis that matters. In the current market landscape, how the market reacts to news has become more critical than the news itself. The PEG play strategy aims to dissect market movements with a refined lens, differentiating the wheat from the chaff.

A crucial insight into the PEG play is that a robust earnings report alone is insufficient. What we seek is a substantial gap up in the stock price, complemented by a strong closing. The devil lies in the details, and a stock that gaps up on strong earnings but closes in the red is not our ideal PEG play. To put it simply, a "Power Earnings Gap" is a stock that not only gaps up post strong earnings but also closes the day with a robust candle, ideally at or near the session's highs.

The volume in such scenarios automatically skyrockets, adding conviction to the move. Following the footsteps of the big fish—insiders, movers, and shakers—is our key to success. Fortunately, we can discern their footsteps through stock price action and volume patterns, making our journey as traders both insightful and profitable.

We have provided visual example, demonstrating the potency of marrying strong fundamentals with robust technical. We believe that a picture is worth a thousand words, and these charts will speak volumes about the potential of the Power Earnings Gap strategy.

Image courtesy: Tramondo Investment Partners- tramondo.ch

We've discovered a winning duo – a marriage of "strong fundamentals" and "strong technicals." Picture this: stocks that not only boast robust earnings but also gap up and close strong on massive volume. This strategy, known as Power Earnings Gaps (PEG) plays, holds the key to propelling stocks higher.

But wait, there's more! We're not just stopping at earnings and technicals. Our playbook includes a careful consideration of overall market strength, geopolitical influences, and a stock's short interest. Why? Because stocks with high short interest that gap up on strong earnings create spectacular short squeezes, igniting explosive moves.

Here's the kicker: 'Power Earnings Gap' candidates with double-digit short interest emerge as the BIGGEST and MOST aggressive movers on the upside. Ready to ride the wave?