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

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.