I did not take the trade. This is only for my training/experience.
Kroger (KR) reports before the open tomorrow. Fundamentally it looks good. I scored it at 8 out of 10 (bullish). Also, the last fifteen quarters it beat twelve times with three that came in line with expectations. It beat revenue eleven of the last fourteen quarters (one data not available). It also has a history of raising guidance. So it is a good company.
Technically it is overextended but there is still room for more upside of about 3.5 to 4.5%. So currently at 51.87, it can go to 53.75 - 54.25 tomorrow. I believe it will gap up.
I did not take the trade because it is overextended (see chart below). It has been on a run up since February. It also made a strong move up that past six weeks. So it is in bull leg of a bull leg. Therefore a bad report will likely result in a huge drop if it gaps below the support line since there is so much room to move without hindrance. While a good report will not result to any significant move up except the 3.5 - 4.5% move I'm expecting. The risk-reward ratio is not worth the trade.
KR-DAILY
GOOGL-15MIN
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