RTR Update – TEAM Soars After Earnings

TEAM absolutely soared after earnings on Friday up 24.7% on the day on massive volume of over 7 million shares.  Average daily volume was running at about a million shares so that is 7x the average.  That is around 300 million dollars of stock trading hands which likely means that big institutions are loading up on the stock.

I increased my position size in TEAM after earnings were out.  I put two orders to buy more shares of TEAM below 45, where it was trading around after hours on Thursday, and was lucky enough to get filled on both orders at the start of trading Friday.  I also bought one more lot of shares in TEAM at the close on Friday since it was not giving back any gains for the day.

TEAM is now up almost 30% since I added it as an RTR position on 10/8.  This stock is exhibiting all the characteristics you want to see for a Stage 2 stock that can make big gains:

  • Leading stock in a leading sector (enterprise software)
  • Outperforming the S&P 500 while the S&P 500 is in an uptrend
  • Under accumulation by the institutions
  • No overhead resistance

Depending how TEAM trades from here I may take some partial profits if it gets too extended from the 30-week MA, but I will definitely be holding shares for a longer term move higher.

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2 thoughts on “RTR Update – TEAM Soars After Earnings

  1. Hi Justin,
    I notice on twitter you just posted:
    Market has been deteriorating under the surface for the last week or so. More sectors weakening than strengthening http://screener.nextbigtrade.com/#/health

    Is there a certain threshold level of # of weakening compared to # of strengthening that you consider to be a deeply concerning level and definitely a red flag? Can you put this into some context in terms of past health level readings and market corrections that may have followed? I am trying to determine if one can try and quantify a potential correction % based on health readings noted in your system.

    Currently we have Strengthening Sectors: 61 Weakening Sectors: 86

    Based on your experience, is this a big red flag and do you know what levels (weakening vs strengthening) have in the past led to decent market pullbacks/corrections (of at least 3%)? It would be interesting to see if there is some level of weakening vs strengthening that correspond to precursors of market declines of 3% or more not too long after such weakening vs strengthening levels have been reached. Perhaps we have had similar readings in the past that you now point out and the market barely budged lower, despite such a health reading, only to continue higher in time (you may have an answer given you probably watch this indicator closely).

    Thank you for your insight.

    1. Hi Sarah,

      I don’t have the ability yet to see the historical numbers for this data so I’m not sure. I will say back in Feb-Mar of this year the market deteriorated for about 2 months with the health having more weakening than strengthening sectors, but all it did was move sideways and no meaningful correction ever developed. My guess is sometimes it would lead to a market correction and otherwise it would lead to just a small pullback. Same thing happens with divergences in price, for example the FANG stocks have been lagging the market since the summer but maybe they are due to rally now and that doesn’t mean that a bigger market correction is coming.

      I don’t think it’s possible to predict the magnitude of a correction with any indicator. What I do is constantly survey the market for leading stocks and sectors, and if nothing is showing up then naturally I move to a heavier cash position.

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