Trading Strategies For C3.Ai Stock Heading Into Q4 Earnings - (NYSE:AI)

C3.Ai Inc AI was plunging Wednesday after surging 33.42% on Tuesday. The company is set to print its fourth-quarter financial results after the markets close.

Analysts expect the company to report EPS of negative 17 cents on revenues of $71.32 million for the quarter ending March 31.

On May 16, Piper Sandler analyst Arvind Ramnani reiterated a Neutral rating on C3.Ai and maintained a $23 price target, which C3.Ai surpassed that trading day.

When the company printed its third-quarter earnings report on March 2, the stock skyrocketed 33.65% the following day, but by March 15, the stock had retraced toward the $20 mark, giving back all its gains.

For that quarter, C3.Ai reported an earnings loss of 6 cents per share, beating a Street estimate for a loss of 22 cents. The company also posted a top-line beat, reporting revenues of $66.7 million compared to the $64.25-million consensus estimate.

From a technical perspective, C3.Ai looks mixed heading into the event, trading in an inside bar pattern but with a gap below. Of course, holding a position in a stock over earnings can be akin to gambling, as stocks can rise following an earnings miss and fall after reporting a beat.

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The C3.Ai Chart: C3.Ai reversed into an uptrend on May 3, surging about 136% since that date. The stock’s most recent higher high was formed on Tuesday at $43.95 and the most recent higher low was printed at the $26.27 mark on May 24.

  • On Wednesday, C3.Ai was working to print an inside bar pattern, with all the day’s price action taking place within Tuesday’s trading range. The pattern leans bullish because the stock was trading higher beforehand. 
  • There is a gap below that exists between $33.50 and $35.20. Gaps on charts fill about 90% of the time, which suggests C3.Ai is likely to retrace to fill the empty range in the future. If the stock falls following its earnings, it may reverse course off the bottom of the gap.
  • If C3.Ai receives a positive reaction to its earnings print, bullish traders want to see the stock spike up over Tuesday’s high-of-day, preferably during regular trading hours so as to not form another gap.
  • C3.Ai has resistance above at $43 and $48.29 and support below at $36.52 and $32.

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