If you're trying to build your earnings season watch list by looking for stocks setting up in a base ahead of earnings, here's one that fits the bill: IBD 50 member TAL Education ( TAL ). It's expected to report on Jan. 17 and is currently about 9% shy of a 36.26 buy point. The entry is based on a tenth-stage cup without handle .
[ibd-display-video id=2385970 width=50 float=left autostart=true] Keep in mind that buying a stock just before it reports is risky, since an EPS or sales miss could send it sharply lower. You can minimize your risk by waiting to see how the company reports and how the market reacts. Using an options strategy during earnings season is another way to put yourself in a position to profit, while minimizing the potential downside.
While the company's bottom line growth dropped in the company's most recently reported quarter from 75% to 0%, revenue rose 68%, up from 65% in the previous report.
Analysts expect EPS growth of 50% for the quarter, and 11% growth for the full year. Annual growth estimates were recently revised lower.
TAL Education has a 99 Composite Rating and earns the No. 1 rank among its peers in the Consumer Services-Education industry group. Bright Horizon Family Solutions ( BFAM ) and New Oriental Education & Technology ( EDU ) are also among the group's highest-rated stocks.
Note: Dates for earnings reports are subject to change. Check the company's website for any updates.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.