Earnings Play: RPM International

On Wednesday, before market, RPM International (RPM) is anticipated to report first quarter EPS of $1.20 compared to $0.95 a year ago on revenue of approximately $1.5 billion, in line with last year. The company manufactures a variety of paints, coatings, and adhesives, and its expected move based on front-month options is 5.9%. The last time the company reported earnings the stock increased 1.5%.

Looking at a daily chart, RPM's stock price has just broken out to the upside of a bullish flag pattern on Monday, October 5th. The MACD line crossed above the signal line on October 1st, a bullish signal. Price will likely advance to retest the all-time high of 87.80. If price can get above 87.80, it would clear a path for price to grind up to 97.90, which is the measured move of the pattern that happens to be around the third Fibonacci target. If price gets up to 97.90, traders should keep an eye out for another flag or pennant to form. Other the other hand, if price cannot hold above the upper trendline then traders should look to the 78.70 support level for a possible bounce. If price cannot hold above the 78.70 support level then it would be a bearish signal that could send prices back down to 71.20.        



Source: GAIN Capital, TradingView

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