RMD Should I Buy
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Not a good buy right now for an impatient buyer. Even after a solid Q2 FY26 earnings beat and dividend raise, the tape is still weak (bearish MACD expansion, price below pivot), and options positioning is heavily put-skewed (very high put/call ratios), signaling caution/hedging. I would avoid chasing today and only turn constructive after RMD reclaims ~255.5 (pivot) and holds above it, ideally with momentum improving.
Trend/Momentum: Near-term trend is bearish-to-neutral. MACD histogram is -0.173 and negatively expanding, implying downside momentum is still building. RSI(6) at 38.5 is not oversold but is weak, consistent with sellers still in control. Moving averages: Converging MAs suggest a transition/indecision phase, but current momentum favors the downside until price reclaims key levels. Key levels: Pivot 255.49 is the near-term line in the sand. Price (252.12) is below pivot, making rallies into 255–262 likely supply zones. Support sits at S1 248.90 then S2 244.82; a clean break below ~248.9 increases odds of a move toward mid-240s. Resistance: R1 262.09 then R2 266.17. Intellectia Proprietary Trading Signals:
Earnings catalyst: Q2 FY26 results beat expectations (non-GAAP EPS 2.81 vs ~2.72 consensus) with revenue around $1.4–$1.42B and ~11% YoY growth, reinforcing fundamental momentum.
Shareholder return: Declared quarterly dividend of $0.60/share (supports quality/defensive appeal).
Fundamental durability: Financial snapshot shows continued margin and EPS improvement trends (see financial performance).
Market/price action: Stock down ~2.97% in the regular session while S&P is -0.65%, indicating relative weakness today.
Options market warning: Massive put-skew (OI and especially volume) points to traders hedging or leaning bearish near term.
Competitive/headline risk: Analyst commentary flags ‘competitor expansion’ headline risk and waning visibility, which can cap the multiple.
Technical pressure: Bearish MACD expansion and trading below pivot increase risk of a support test at ~248.9 / ~244.8.
Latest quarter/season: Q2 FY2026 (reported 2026-01-29/30) showed revenue about $1.4–$1.42B, up ~11% YoY, with non-GAAP EPS of $2.81 (beat). Prior reported snapshot: 2026/Q1 showed continued acceleration: Revenue $1.336B (+9.07% YoY), Net Income $348.5M (+11.94% YoY), EPS $2.37 (+12.32% YoY), and Gross Margin 60.56% (+5.07% YoY). Takeaway: Growth and profitability trends are solid and improving, but the current trading signal mix (technical + options) suggests the market is not ready to reward it aggressively right now.
Recent trend: Ratings and targets have been moving more cautious. Baird downgraded to Neutral (from Outperform) with PT cut to $275 (from $300) citing waning visibility and competitor/headline risk (2025-12-16). Stifel maintained Hold and cut PT to $260 (from $270), noting valuation may be appropriate if longer-term growth decelerates (2025-12-18). Earlier, Baird had already trimmed PT to $300 from $320 while staying Outperform (2025-11-03). Wall Street pros: Strong business execution and earnings delivery; consistent revenue growth and expanding profitability. Wall Street cons: Reduced visibility and competitive/headline risk; concern that medium-term growth could slow, limiting multiple expansion. Influential/political trading: No recent congress trading data available; hedge funds and insiders are neutral with no notable recent trend.
