Walgreens Boots Alliance Reports Strong Earnings, Sparks Stock SurgeWBA shares are trading significantly higher on Friday, following an earnings report that exceeded expectations.

The stock appears to be gaining momentum, prompting our team of traders and technical analysts to designate it as our Stock of the Day.

For the first quarter, Walgreens reported earnings of 51 cents per share, outpacing the anticipated 37 cents, according to analysts.

Sales figures also surpassed estimates, totaling $30.90 billion, which is significantly higher than the expected $29.10 billion.

When a stock price rises, there is often a greater demand for shares than available supply. Traders and investors keen to buy shares may find themselves bidding higher to entice sellers. This creates an upward trend in the stock’s price.

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However, when a stock approaches a resistance level, the situation can change. A surge of sell orders can flood the market, allowing buyers to purchase shares without driving the price significantly higher.

As illustrated in recent charts, Walgreens has encountered resistance around the $11 mark. In both October and December, increases stalled at this level.

Often, a stock may decline after hitting resistance, as sellers start to undercut each other to secure sales. A trend of lowering prices can emerge as other sellers respond similarly, creating a snowball effect that drives the stock down.

Occasionally, though, buyers can gain the upper hand and push prices past the resistance point. This scenario is referred to as a breakout.

A breakout indicates that the sellers who established the resistance have exited the market, either by completing their transactions or withdrawing their orders.

This shift may force buyers to bid higher again to entice sellers, potentially setting the stage for a new upward trend in Walgreens’ stock.

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