In 1983, a Hungarian immigrant carried a handheld computer he built himself onto the floor of the American Stock Exchange, and the traders around him wanted it banned.

His name is Thomas Peterffy.

He could not out-shout anyone in the pit, so he wrote code in his head during the day, programmed it at night, and brought the printouts down as cheat sheets.

He was right, and they were wrong, and that trading floor does not exist anymore. In 1993, he turned the operation into Interactive Brokers (IBKR), and at 81, he is still chairman, still the largest shareholder, with nearly his whole fortune sitting in the company he built to replace the floor he stood on.

That is why this business runs a 77% pretax margin. Not gross, pretax.

It was engineered from day one to not need people, which is also why operating expenses went down last year while revenue climbed almost a billion dollars.

And the engine is still running.

Accounts up 34% to 5.19 million, client equity up 49%, margin loans up 65% to more than $100 billion, and June daily average revenue trades running 53% above last year.

That is the story. Now the part I care about more.

IBKR has stacked moving averages in bullish order with the 8-day EMA at 94.20 above the 21-day at 92.74 above the 34-day at 90.93. All three are rising. That is a trend and pattern moving in a clear upwards direction.

Then yesterday the stock dropped 5.34% to 92.21 and landed right in the middle of those averages, with the 34-day sitting just underneath at 90.93.

A name with this kind of strength does not come back to its own trend line often, and when it does I want to be watching.

The 34 EMA is the entire argument now. Hold it and the uptrend is intact and yesterday was noise in a strong chart. Lose it and the character of the move changed, and the setup is dead.

There is also a daily squeeze on, which means volatility has compressed and the stock is coiled for a move it has not made yet.

And it is coiled into a catalyst. IBKR reports on Tuesday, July 21. The squeeze is loaded, earnings decide the direction, and the 34 EMA tells me whether the trend even survives the wait.

Your Action Plan

This is a stock I want to watch for a potential trade after it announces earnings. I’m looking for something called the post-earnings drift. Specifically, I want to see the stock have a bigger move than what the market is anticipating. If it does, it could set up for some strong follow-through action.

If you want to know what else I’m trading, and how I’m finding opportunies in this choppy market, check this out.