On Wednesday, before market, Paychex (PAYX), a payroll services company, announced second quarter adjusted EPS of $0.73, exceeding the estimate, up from $0.70 a year ago on revenue of $983.7 million, also above the forecast, down from $990.7 million last year.
From a chartist's point of view, Paychex's stock price gapped up to an all-time high after the company reported earnings before the bell. On December 17th, Paychex's stock price broke out to the upside of a bull flag pattern that began to form in late-October. The simple moving averages (SMAs) are arranged in a bullish manner, as the 20-day SMA is above the 50-day SMA and the 50-day SMA is above the 200-day SMA. As long as price can hold above its breakout level around 95.00 it will likely grind towards its first Fibonacci target of 107.75. If price can get above 107.75 then it could rally to its second Fibonacci target of 114.50. On the other hand, if price slips below 95.00 traders should look for support at 89.25. If 89.25 fails to support price, it would be a bearish signal that could send prices lower.
Source: GAIN Capital, TradingView
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.