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Will Rocket Companies Launch On Earnings?

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Will Rocket Companies Launch On Earnings?

When Rocket Companies Inc (NYSE: RKT) reported fourth-quarter earnings on Feb. 25, shares soon hit the moon.

Rocket Companies reported a 162% year-over-year increase in revenues of $4.8 billion, beating the Street’s estimate of $3.9 billion. Earnings per share of $1.14 beat the estimate of 87 cents.

Rocket Companies also announced a surprise special dividend of $1.11 per share that was paid to all shareholders as of March 9.

In the three days following Rocket’s report, shares skyrocketed 116% to an all-time high of $43, partly due to the WallStreetBets community piling into the stock.

Like many of the other stock targets in the community, such as GameStop Corporation (NYSE: GME), the parabolic rise was followed by a plummeting fall, and shares of Rocket Companies are down almost 50% from that $43 high.

Could Rocket Companies pull off another big surprise when it reports earnings Wednesday after the closing bell?

See Also: Rocket Mortgage Classic 2021 To Be Joined By Defending Champions, Fan Favorites

The Rocket Companies Chart: On Monday morning, Rocket Companies opened on resistance at $22.65 and rejected it. The stock is also trading slightly below the eight-day exponential moving average and the 21-day EMA, with the eight-day EMA trending below the 21-day EMA, both of which are bearish indicators.

The stock has spent the last 32 trading days near the $23 level, trading in a sideways pattern, with a lack of any bullish or bearish bias. Rocket Companies has had low trading volume over the past few months, which shows there's both a lack of buyers and sellers of the stock. This indicates news, or earnings, could bring in volume to force the stock to choose a direction.

Bulls want to see bullish volume come into the stock prior to or directly after the company releases its earnings report. If the stock can regain $22.65, it has room to move up to $26.70 before bumping into another resistance level.

Bears want to see large bear volume enter after Rocket Companies releases earnings to push the stock down towards the $19 level.

RKT Price Action: Shares of Rocket Companies trade around $22.40 at publication time.

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