Earnings play: Paychex

Look for support around 95.00.

Uptrend 4

On Wednesday, before market, Paychex (PAYX), a payroll services company, announced second quarter adjusted EPS of $0.73, exceeding the estimate, up from $0.70 a year ago on revenue of $983.7 million, also above the forecast, down from $990.7 million last year.

From a chartist's point of view, Paychex's stock price gapped up to an all-time high after the company reported earnings before the bell. On December 17th, Paychex's stock price broke out to the upside of a bull flag pattern that began to form in late-October. The simple moving averages (SMAs) are arranged in a bullish manner, as the 20-day SMA is above the 50-day SMA and the 50-day SMA is above the 200-day SMA. As long as price can hold above its breakout level around 95.00 it will likely grind towards its first Fibonacci target of 107.75. If price can get above 107.75 then it could rally to its second Fibonacci target of 114.50. On the other hand, if price slips below 95.00 traders should look for support at 89.25. If 89.25 fails to support price, it would be a bearish signal that could send prices lower.    

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.