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This morning I’m recommending a bullish trade on Attunity Ltd. (NASDAQ:ATTU), a tech company that provides Big Data management software.
My indicators are giving strong bullish readings this week, and the major indices have now broken out from their short-term consolidation ranges.
One of the main catalysts for the latest bullish move was the statement from the Federal Reserve on Wednesday and the subsequent press conference by Fed Chairman Jerome Powell. Powell took a very dovish stance in his statement and essentially indicated that the Fed would pause on future rate hikes.
The Fed seems to have now realized what I’ve been saying all along…that there is no inflation in sight. It now looks like the Fed hawks have left the building.
Tech stocks seem to be doing well in this market environment, and after strong earnings reports from several big companies, I think it’s time to get bullish.
This week ATTU, along with three major tech companies, Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT), reported earnings. MSFT met expectations, which sent the stock down, but FB and AAPL both had strong reports.
FB rallied over 10% yesterday after announcing it beat earnings expectations, and AAPL’s report showed the company could thrive even as iPhone sales decline. The performances of these stocks are a good sign for the tech sector, and like these tech giants, ATTU put up good numbers this quarter.
ATTU reported $0.11 earnings per share (EPS) when analysts predicted $0.04 EPS for fourth quarter. ATTU isn’t as big a name as FB or AAPL, but strong earnings and a bullish tech environment could carry this stock higher.
Breaking Above $23.50
In November of 2018, ATTU broke above its 50-day moving average (MA). It stayed above both its 50- and 200-day MAs for all of November, but after rejection at the $23.50 level, it started to move downward.
Daily Chart of Attunity Ltd. (ATTU) — Chart Source: TradingView
If we look at the chart above, we see that ATTU encountered resistance at the $21 level in December, and it dropped below its 50-day MA toward the end of the year. Now, ATTU has established new support at its old $21 resistance level, and it has broken above the $23.50 resistance from November.
Now that the company has reported such strong earnings, I wouldn’t be surprised to see it establish support at $23.50. The technical picture looks good for ATTU, and its strong earnings performance should take it higher in the short term. For that reason, I’m recommending a bullish call option on ATTU.
Buy to open the Attunity Ltd. (ATTU) April 18th $30 Calls (ATTU190418C00030000) at $1.15 or lower.
Note: The Good Friday holiday falls on April 19th, 2019. Because U.S. markets will be closed that day, April monthly options will expire the day before, on April 18th, 2019.
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InvestorPlace advisor Ken Trester brings you Power Options Weekly, which delivers 5 new options trades and his latest trading advice to you each Friday. Trester has been trading options since the first exchanges opened in 1973 with a winning streak that goes back to 1984 with money-doubling average annual profits since 1990.