The Most Valuable Commodity I Know of is Information

The information gleaned from this particular earnings season should not be overlooked, for I suspect it will form part of a separation process into the autumn where we see which firms in the hottest sectors truly sustain uptrends, and which take a backseat. 

Case in point: Recent strong software plays have reported within the last two weeks, such as CSOD and ZEN. Both are continuing to act well after earnings, despite some initial, almost expected volatility. 

This week, EBIX fits the bill, seen on the daily chart, first below. Note how the stock initially sold off but was gobbled up rather quickly by buyers, following-through higher yet today. Typically, that type of price action signals potent underlying demand for the intermediate-term. looking out to the fall months. 

Contrast the EBIX daily chart to MODN, second below, which prior to earnings yesterday looked similar to EBIX. 

However, as we can see MODN is not fairly well, taking a shellacking after earnings. MODN may not be headed much lower, but it almost assuredly will not a few weeks to set back up and heal the damage from the sizable move lower.  

So while I tend to not play earnings, I am eager to use the information gained from the various reactions, especially within arguably the hottest emerging sector in the tape: Software. 

More on this in my usual Midday Video for Members.