Skillz Inc (NYSE:SKLZ) is set to report earnings after the close Tuesday amid bearish sentiment in the stock.

When Skillz reported fourth-quarter results, its revenue had increased 95% year-over-year to $68 million, compared to $35 million for the same quarter in 2019. Following Skillz’s earnings report, shares gapped up over 8% but immediately sold off and closed flat.

In its last report Skills also initiated guidance for full-year 2021 of $366 million. Traders and investors will gain insight into whether the milestone is achievable after seeing the company’s first-quarter 2021 results.

A stock does not always react positively to an earning’s beat or negatively to a miss, however, and traders often compare buying options or shares of a company to hold through earnings to playing the lottery.

A rule of thumb for trading a company’s earnings is that if a stock has had a large run north into its earnings even it’s likely to sell off regardless of whether the report is positive or negative.

In contrast, with Skillz stock selling off into earnings a positive report could cause a big bounce.

See Also: Skillz Makes A Bullish Breakaway And Options Traders Think There's More Where That Came From

The Skillz Chart: On Monday Skills tried but was unable to regain $18.10 as support.

The stock broke bullish from a three-month long downtrend on April 21, but wasn't able to sustain enough bullish volume to hold above the $18 level and retreated back 23%.

Skillz is trading below the eight-day and 21-day exponential moving averages with the eight-day EMA trending below the 21-day EMA, both of which are bearish indicators. Skillz’s stock also lost the 200-day simple moving average (SMA) on Thursday indicating overall sentiment in the stock is bearish.

Bulls want to see a positive reaction to Skillz’s earnings and for big bullish volume to come in and pop it back over resistance at $18.10. If it can hold that level it has room to move towards $23.23.

Bears want to see the eight-day and 21-day EMA and the 200-day SMA to continue to push Skillz down towards the next support level at $15.90. If the stock is unable to hold that level of support it could revisit the $12.50 mark.

SKLZ Price Action: Skills was trading higher by 3.8% at $17.17 at publication time