Symbotic Inc SYM shares are soaring Tuesday after the company reported blowout numbers for the fourth quater. The Street was looking for revenues of $470.27 million. The company reported $576.76 million. It also reported earnings of five cents, which was ahead of estimates of three cents.
Despite this, some are taking advantage of this move higher to exit their positions. This is why our team of expert traders has made it the Stock of the Day.
It is important for traders and investors to understand the fundamentals of the stocks they are trading. It is also important for them to understand the technicals.
Symbotic’s gross profit margin increased from 15% to 18.8%; net income was $28,073,000. A year ago, the company reported a loss of $45,415,000.
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Regardless of the quarter’s outstanding results, the stock may have run into a ceiling. It may even be about to reverse and head lower.
As you can see on the chart, the shares peaked in the middle of July around the $41 level. Now some investors and traders who bought shares then are taking advantage of the move higher. They had been looking at losses since the price moved lower at the end of July.
Now they have a chance to sell their shares at the same price they paid for them. This will allow them to get out of their positions at breakeven.
So, they place sell orders at their buying price. This large concentration of sell orders has created resistance at the same level that had previously been resistance.
Some of these sellers may become concerned that others will be willing to sell at lower prices than they are. They know the traders and investors who wish to buy will go to whoever is willing to sell at the lowest price.
As a result, they reduce the prices they are offering their shares. This could result in a snowball effect that pushes the stock lower as other concerned sellers see this and do the same thing.
Some traders focus on fundamentals. Some traders focus on technicals. The best traders focus on both.
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