Earnings Play: Estee Lauder

Estee Lauder's price is at the top of an ascending wedge pattern, here's how to play it.

Trader 1

On Thursday, before market, Estee Lauder (EL) is expected to release fourth quarter LPS of $0.20 compared to an EPS of $0.64 the prior year on sales of approximately $2.4 billion vs. $3.6 billion last year. Estee Lauder is the world leader in the global prestige beauty market and on August 13th the Co announced a joint development agreement with Atropos Therapeutics, a developer of senescence modulating chemicals, in an effort for the company to enter the botanical skin care space. 

Looking at a daily chart, Estee Lauder's stock price is advancing within an ascending wedge pattern that began as an uptrend in mid-March. The RSI is in overbought territory sitting at 73. Since August 13th, after price reached the top trendline the candle sticks have been forming spinning tops with short tails. These candle sticks represent very low price fluctuations in the daily movement which could mean that the buyers have dried up. Given that price has reached the top trendline of the ascending wedge pattern, along with the overbought RSI reading and spinning top candle sticks, the set-up is bearish. Price will likely pull back to the 199.00 support level. If price breaks below 199.00, it could see further decline to 192.00. However, if price breaks above resistance at 217.00, it could be looking to retest the all time high at 220.00.         



Source: GAIN Capital, TradingView

More from Earnings

From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.