Earnings season is in full swing, and I’ve got a red-hot watchlist idea you don’t want to miss.

Spotify Technology (SPOT) is shaping up to be one of the most explosive pre-earnings momentum trades as we head into next week.

Trading just slightly off its 52-week high of $652.63, SPOT has already outperformed the market this year, climbing over 35% year-to-date while major indices like the S&P 500 and Nasdaq remain in the red.

And here’s the kicker: SPOT has a daily squeeze, stacked EMAs on both the weekly and daily charts, and exceptional relative strength—all signs that it could be gearing up for a big run into its earnings announcement on April 29th.

Let’s break down why SPOT’s setup is so compelling right now.

1. Daily Squeeze: Building Energy for a Big Move

SPOT’s daily chart is currently in a squeeze, signaling that the stock is consolidating in a low-volatility range.

What Is a Squeeze?

A squeeze occurs when Bollinger Bands contract inside the Keltner Channels, indicating that volatility has dropped and the stock is coiling like a spring.

The longer the squeeze lasts, the more energy builds up for the eventual breakout—up or down.

Think of it like a tightly wound spring. Once it releases, the move can be explosive.

SPOT’s squeeze on the daily chart, along with shorter time frames, suggests that volatility is contracting ahead of a potential breakout.

Given the stock’s bullish trend and strong relative strength, the odds favor a move higher—especially with earnings on the horizon.

2. Stacked EMAs: A Hallmark of Bullish Momentum

SPOT’s weekly and daily charts both show stacked exponential moving averages (EMAs)—a classic sign of a strong bullish trend.

What Are Stacked EMAs?

Stacked EMAs occur when shorter-term EMAs (like the 8-day or 21-day) align above longer-term EMAs (like the 50-day or 200-day). This alignment shows that buyers are firmly in control, and the stock is trending higher across multiple time frames.

For SPOT, stacked EMAs reinforce the bullish case. They tell us that momentum is strong, institutional buyers are likely supporting the stock, and the path of least resistance is to the upside.

3. Relative Strength: Leading While Others Lag

One of the most compelling aspects of SPOT’s setup is its relative strength. While the broader market has struggled this year, SPOT has surged over 35% year-to-date, outperforming major indices by a wide margin.

Why Does Relative Strength Matter? Relative strength measures how a stock performs compared to the broader market. When a stock outperforms during periods of market weakness, it signals institutional support and resilience. This often precedes further upside as buyers continue to pile in.

SPOT’s ability to hold near its 52-week highs while the broader market remains negative makes it a standout candidate for momentum traders.

SPOT vs. NFLX: Why It Has “Netflix Vibes”

If SPOT’s current setup feels familiar, it’s because it shares a lot of similarities with Netflix (NFLX)—another subscription-based company that just posted solid earnings and saw its share price explode higher last week.

Both companies rely on subscription-based revenue models, offering users unlimited access to content for a recurring fee. They excel at leveraging data and algorithms to personalize user experiences. For example:

• Netflix recommends shows and movies based on viewing history.
• Spotify curates playlists and suggests music tailored to individual tastes.

Additionally, both companies:

• Balance third-party licensed content with proprietary offerings (Netflix Originals vs. Spotify’s exclusive podcasts).
• Focus on global reach, localizing content to appeal to diverse audiences.
• Prioritize seamless cross-platform accessibility to keep users engaged and reduce churn.

With SPOT trading just under its 52-week highs, it feels like a similar run-up to earnings could be in the cards.

Your Action Plan

While I don’t currently have a position in SPOT, this is a textbook momentum pre-earnings trade worth watching closely.

Here’s why:

• The daily squeeze suggests energy is building for a potential breakout.
• Stacked EMAs on the weekly and daily charts confirm strong bullish momentum.
• Exceptional relative strength shows SPOT is leading while the broader market struggles.

With earnings on April 29th, there’s a good chance SPOT continues to run higher into the event.

The technicals, combined with the stock’s outperformance, make it a prime candidate for a pre-earnings momentum trade.

As always, trade responsibly—position size appropriately, and have a plan to exit.

And if you’re looking for a faster way to find explosive setups like SPOT, check out my Opening Bell Aftershocks strategy.

It’s designed to target 100-300% gains within minutes after earnings announcements.

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