A glimpse at the current risk/reward ratio

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Magnificent Seven stocks jumped yesterday just before the critical week of earnings reports. Investors are waiting to see if Big Tech companies can keep its strong growth momentum — especially their earnings guidance. Recently, stocks sold off after a string of hotter-than-expected inflation readings made it likely for the Federal Reserve to keep interest rates higher for longer. The pullback may have made stocks look more attractive, so strong earnings reports will be important to justify this viewpoint. - “We would view the recent pullback as a buying opportunity,” Citi’s Mihir Tirodkar and Beata Manthey said. “Bullish positioning has unwound and now looks more neutral, particularly in the US. The current earnings season could refocus investor attention on solid underlying fundamentals.” Dan Wantrobsku at Janney Montgomery believes that the market is in the oversold territory, so it is poised to bounce back fiercely if earnings reports are strong. - “Thus, if earnings come in strong over the days ahead, stocks are effectively spring-loaded for a bigger counter-trend rally than we have seen thus far,” said Wantrobsku. Here’s an interesting data from Truist Advisory Services. It showed that the average S&P 500 pullback since March 2009 was -10.4%. The median was -7.5%. We’ve witnessed a -5.5% pullback, so there might be more pullback coming. Moreover, Truist found that the pullback averaged 51 days for the duration of decline. We are 26 days into the current pullback. (Source: Truist IAG) Of course, it is just data. The market has a brain of its own. There’s nothing that keeps the current pullback to become the shortest one ever. Regardless, this offers a small glimpse at the risk/reward ratio right now. Tesla’s earnings: Tesla CEO Elon Musk halted the steep decline in Tesla’s stock price (at least for now) when he announced that production of new affordable EV models could begin as soon as this fall to early 2025. Moreover, these affordable models can be produced on the same manufacturing lines as Tesla’s current models. It was enough to distract investors from the carmaker’s 9% decline in first-quarter revenue — the biggest drop since 2012. Its earnings per share also missed expectations — 45 cents adjusted vs. 51 cents expected. Tesla marked the beginning of the week of Big Tech companies reporting earnings. Investors will watch whether they can deliver strong guidance to resume the rally. Watch Out For This High-Flying Stock Today’s Stock Pick: Alarum Technologies (ALAR) This is a sneaky stock that has been quietly racking up incredible gains for the shareholders. The stock jumped by nearly 500% from mid-December to April 23rd. There could be plenty of gas remaining in the current rally. First, let’s talk about the company itself. Alarum Technologies used to be a cybersecurity company for six years from 2013 to 2019. But it pivoted its strategy when it acquired NetNut — the data collection business. That segment did so well that the company sold its enterprise cybersecurity business to focus on NetNut. (Source: Alarum Technologies) So, what does NetNut do? It collects data for its clients by scrapping the web. Let’s say that its client is an airline company. Airline tickets actually change its prices based on user IP address and location. For example, a German consumer searching from Germany will see different prices from an US-based consumer searching in the USA. So, NetNut would scrape the airline’s competitors to compare ticket prices (based on IP locations) and offer this data for the company to price its tickets better. (Source: Alarum Technologies) There are plenty of other purposes for data collection. Nike and Adidas can use it to monitor the web to make sure nobody is using its intellectual property and trademarks to protect their brands. Companies use it to monitor SEO for rankings or to gather data on competitive SEO practices and strategies. (Source: Alarum Technologies) Apollo.io and RocketReach use their technology to scrap data for people’s emails and phone numbers. Sure enough, Alarum’s technology is so valuable that its customer retention rate was 153% as of December 31, 2023. Meaning? The number was above 100% because more customers chose to spend more with the company — while fewer chose to leave. All of this led to a whopping 1,700% revenue growth in the last five years! (Source: Alarum Technologies) What’s more, the company just turned profitable in the first half of 2023. Wall Street, of course, loves profits. Its profit doubled in the second half of 2023 from the first half. This company is growing fast. (Source: Alarum Technologies) Bottom line: Alarum Technologies is a high-flying stock that just turned profitable. Its earnings per share may grow rapidly from now on. The run won’t last forever, but it could be good time to jump in while it’s in the early stage of its profit growth. [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!](       © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](