Trading Strategies For Rumble Stock Before And After Q1 Earnings

Rumble, Inc RUM was trading slightly higher on Monday, consolidating above the 200-day simple moving average (SMA), which the stock regained as support on Thursday. The company is set to print its first-quarter financial results after the markets close.

Analysts expect the Toronto-based online video company to report EPS of negative 1 cent on revenues of $15.93 million for the quarter ending March 31.

On March 31, DA Davidson analyst Tom Forte reiterated a Buy rating on Rumble and maintained a $15 price target.. The price target suggests about 50% upside for the stock.

When Rumble printed its fourth-quarter earnings report on March 30, the stock rallied about 7% the following day before plunging 14% over the three trading days that followed. 

For that quarter, Rumble reported break-even earnings per share, beating a Street estimate for a loss of 2 cents per share. The company posted a big top-line beat, reporting revenues of $19.957 million compared to the $10.18-million consensus estimate.

From a technical perspective, Rumble looks bullish heading into the event, having settled into an uptrend on the daily chart. Of course, holding a position in a stock over earnings can be akin to gambling, as stocks can rise following an earnings miss and fall after reporting a beat.

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The Rumble Chart: Rumble surged almost 5% on Thursday, regaining the 200-day SMA as support and has since been consolidating above the level, which is healthy. If Rumble can remain above the area for a period of time, the 50-day SMA will eventually cross above the 200-day, which would cause a golden cross to form.

• Rumble reversed into an uptrend on April 27, after a bounce up off the $7.30 area. Since then, Rumble has printed a series of higher highs and higher lows, with the most rececnt higher low formed on May 10 at $8.95 and the most recent confirmed higher high printed at the $10.20 mark on May 9.
• On Monday, Rumble was working to print a doji candlestick, which suggests indecision. If the stock receives a bullish reaction to its earnings print, Rumble is likely to print a higher high to confirm the uptrend remains intact.
• If Rumble recieves a bearish reaction to the news and falls under the 200-day SMA, the recent bullish price action will serve as a bull trap and Monday’s high-of-day will become a lower high, which will negate the uptrend.
• Rumble has resistance above at $10.43 and $11.27 and support below at $9.76 and $8.77.

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