BLKB Still on ‘Sell’ Signal

Market Update: After a great deal of intervention by the Fed, coupled with the hope that Congress will be able to pass a stimulus bill to aid those out of work, the futures this morning pointed towards a positive day in the markets.

Though we may start off in the green, we are still firmly in a bear market as the major indexes are still around 30% off from their previous highs.

The good news is that even in a bear market, traders can make a profit if they utilize the right strategy.

My PowerTrend system applies just as well in bearish markets. I shift my focus from bullish call options and call option spreads to bearish put options and put option spreads, but the underlying system remains the same.

Now, let’s beat the bear market and start making money.

On Friday, we looked at a Daily Price Chart and an On Balance Volume Chart for Cummins Inc., noting that the stock has been in a price downtrend.

Today’s Chart of the Day is a Daily Price Chart for Blackbaud Inc. (NYSE: BLKB).

Blackbaud, Inc. provides cloud software solutions to nonprofits, foundations, companies, education institutions, healthcare organizations, and individual change agents in the United States and internationally. The company offers fundraising and relationship management solutions and services, including Blackbaud Raiser’s Edge NXT, Blackbaud CRM, Blackbaud eTapestry, Blackbaud TeamRaiser, and more.

Now, below is a Daily Price Chart for Blackbaud Inc.

Back in November 2019, the BLKB 1-Month price crossed below the 10-Month simple moving-average (SMA) indicating BLKB is on a PowerTrend ‘sell’ signal (circled).

BLKB chart

Guess what happened next…

Sure enough, prices continued to fall.

Since the PowerTrend ‘sell’ signal occurred for the stock back in November, when the stock was around $82.88, the stock has dropped 37.8%.

Now, as you can see, the 1-Month moving-average is still below the 10-Month SMA. That means the bearish trend is still in play!

This bearish price trend makes BLKB a good candidate for a put option purchase.

As long as the 1-Month price remains below the 10-Month SMA, the stock is more likely to keep trading at new lows in the coming days and weeks.

We’ll be keeping our eye on this stock as it continues to trend downward so we’ll know the moment the market conditions shift and the stock begins to come back up offering a better buying opportunity in a bearish market.

Additionally, we’d like to talk about how a previous Chart of the Day stock has done…

On March 17th, we highlighted American Airlines Group Inc. (NYSE: AAL), noting that AAL’s 1-Month price was trading below the 10-Month SMA.

Since March 17th, AAL shares have dropped 33.85%.

If you had purchased the right put option contract, you would be up 112.95% in less than a weeks’ time!

That’s the power of options.

Best Regards,

Chuck Hughes
Editor, Chart Of The Day

Chuck Hughes

Written By Chuck Hughes

Before Chuck Hughes won 10 Trading Championships, he was an accomplished Air Force pilot. In fact, he credits his success as a stock and options trader to his disciplined upbringing and career. When he was deciding between a career in the Navy and a career in the Air Force, the Navy told him he’d only have a 33% chance of flying jets. The Air Force gave him 100%. He liked those odds better. 35 years ago, Chuck had a wife, a young daughter, a son on the way, and a huge mortgage to afford. He didn’t want to give up on his lifelong dream and stop flying for a major commercial airline. He knew he needed to supplement his income during the 15 days a month he wasn’t flying. So he used his experience in discipline and math, and his understanding of finance and the stock markets (which he’d always been interested in,) and opened a $4,600 trading account. He made over $460,000 in profits his first two years of trading, and he hasn’t looked back since. When he was diagnosed with Meniere’s disease 15 years later, which commonly leads to vertigo…He knew his career as a pilot wouldn’t last much longer with those odds. But he didn’t have to scurry to find another gig, or panic about how his family would eat… He’d spent the last 15 years perfecting his system and raking in cash. As an options trader, Chuck does not let his emotions get in the way of his trading strategy. He adheres to disciplined and methodical options and stock trades. Because he respects the options game so highly, and understands the true freedom that financial solvency can bring, Chuck was able to design and refine his system and win those 10 Trading Championships. Put simply, Chuck Hughes’ trading strategies work, and in all types of market conditions. They’ve worked throughout the bull, bear, and flat markets America has seen in the last 30 years. Chuck Hughes has spent that time building a reputation as one of the most trustworthy options traders in the industry. His publishing group Legacy Publishing LLC was one of the few trading groups on the planet to have correctly predicted and profited from the 2008 financial crash .As a published author 16 times over, a 10-time Trading Championship winner, and an options-trading teacher for 25 years, he’s learned to trade and teach without an ego.