EQPT

Summary

Sell EQPT into strength. Liquidate longs in tranches, go flat with no new longs. Only a small tactical fade is acceptable with a stop above resistance on expanding volume. Volatility around 6% and implied volatility at 89.5% into the Sept 21 litigation deadline demand reduced exposure. Horizon is 5 trading days, revisit only after Sept 21 clarity and a high-volume hold above overhead resistance.

The case

Our analysis sees the recent bounce of +16% reclaiming the 10-day and 50-day averages but remaining 14% below a declining long-term average in a strategic downtrend. The move shows volume betrayal with 1.83M upside volume versus 4.59M on the prior dump, RSI 54 showing velocity not strength, MACD still -0.34, and heavy overhead supply into the upper Bollinger band. We reject new shorts or puts into 89.5% implied volatility and 6% noise, and reject waiting for a support back-test that failed on the way down. Fundamentals remain stressed: PE 195.5 on $0.10 EPS, 0.5% net margin, Q1 operating income of $1M vs $179.1M in Q4, negative free cash flow for five quarters with TTM -$1.018B, debt of $4.04B and net $2.75B with D/E 303.9, heavy quarterly interest around $70M, $706M Q1 dilution, SG&A up 36%, and allowance of $74M. The only verified news is the Sept 21 Berger Montague fraud deadline with sentiment at -0.649. A 25k insider buy is 0.17% of the 14.38M holding and 870 calls versus 207 puts looks like lottery positioning into a binary event. Upside to the $33.20 target requires flawless second half execution with defensive filings, no guidance, and supplier, pricing and ownership risks. Preserve capital and redeploy to URI/HRI or cash.

What would weaken it

• Sept 21 fraud deadline binary risk
• 89.5% IV and 6% volatility whipsaw
• Negative FCF, $4.04B debt and dilution