TNETAgain, another opportunity to DCA. Expecting this weeks earnings report to provide the fuel that this stock needs to turn around and shoot for the all time highs.
Market insights
BUY TNETWe are currently sitting at a significant demand zone. Looking to catch this stock own the reverse and ride it to the previous high.
4/27/24 - $tnet - a buy but complicated - vrockstar4/27/24 - outsized move for the stock on eps -17% seems too much. however, growth subdued for next 2 yrs doesn't help. even 8% implied fcf yield while juicy and sticky-ish base... is not exactly what the mkt wants to pay for this -ve growth i'm sensing - it's probably closer to 10% for this type of scale + net cash + sub 5x EV/revenue multiple names. downside here could defn be $100 level and mkt beta skewed downsize here on a nasdaq/ related B2B misses puke... toward mid to low 90s where this becomes a more obvious buy. dip bought this into the close, have been trading it all day... am either flat or only marginally down maybe 50 bps on the position. unfortunately not a very rentable stock either so even going out the curve to say monetize jan '25 C's doesn't pay a ton... and it's not a super liquid chain either. i'll probably look to sell this for a meager profit if we open green on monday potentially clearing out of the whole position perhaps i'll float 1/3 of it for a second day move if goes green. if we see a red open i might just cut and set my "look again" at closer to $100 where we have a gap fill from aug '23 at ~$93
TNET: Bullish BreakoutI've been watching TNET since their massive 1-day spike of 23% back in February, and they've been flat in a horizontal channel since. That was a strong clue that I needed to be patient and wait out for a break out on them. Well, it's happening now and the prices are breaking out of that channel in an upward trajectory. TNET starting bubbling last week the market rally, and it appears to be continuing ahead. They were also completely untouched from any bad news in May, and they're making solid profits from a fundamental perspective.
For technicals, everything is bullish. Moving averages have a strong 50-day over the 200-day, and the 50-day rose to put the squeeze on the 20-day with the 20-day finally diverging upward. MACD continues positive but has started to accelerate upward on the histogram. ADX shows a trend in place with DI- crossing ADX downward last week and DI+ strongly diverging upward above ADX showing the the trend is good and is only beginning to pickup steam. Relative price strength is high but not yet overbought. Rate of change is also breaking upward and money flows are starting to move into the security. There's no short squeeze happening and it seems that this stock scares the pants of the bears.
I put into this in the morning on Tues adjusting my industrial holdings, and their growth resembles a tech stock more than a industrial which makes sense with their cloud and online offering of HR services.
Watching TNET for break outThis chart looks great on the weekly, too. I'm hoping to get in if it pulls back to the lower, long term trend line for a break out of this potential bull flag. Gray area is potential overhead resistance but I'm betting on it not being very strong if the channel breaks to the upside. Stock is holding up well in a seriously downward market as well.
Risk is that it breaks out before retesting lower channel.
