NEW YORK (TheStreet) -- The maker of devices used to enter electronic cash payments, VeriFone (PAY) has both positive fundamentals and technicals as the company plans to report quarterly earnings after the closing bell on Thursday.
On Monday, Raymond James upgraded the company's stock to outperform from market perform. On May 22, Imperial Capital initiated coverage on the stock with an outperform rating and a $44 price target.
As a result of positive price movement, the daily chart confirmed a "golden cross" where the 50-day simple moving average moved above the 200-day SMA. In addition, the weekly chart became positive but overbought.
Analysts expect VeriFone to earn 33 cents a share, but to keep a five-quarter winning strike alive the company must beat that estimate. The earnings beats have been by 4 cents to 6 cents each quarter, which raises the bar in terms of upside post-earnings volatility.
With the stock at a 52-week high, an earnings beat may be priced into the stock's technical momentum run-up.
Let's see how the earnings volatility can play out looking at the daily and weekly charts.
Investors not familiar with technical analysis should begin with the notion that a price chart for a stock shows a road map of past price performance, which provides guidance for predicting future share price direction.
Here is how to read a daily chart: There are two moving averages to follow; the 50-day SMA is in blue, while the 200-day SMA is in green.
Here is how to read a weekly chart: This chart shows weekly price bars going back to the beginning of 2007 and thus includes the crash of 2008 and then the bull market for stocks that began in March 2009.