Saturday, 17 November 2018

Trading the News

A strategy to trade on earning result news.
 
Find a calendar and stocks planning to release earning results.  Pick some stocks with the following criteria: 

A.     Uptrend over two months and strong trading up into the results. Looking at a gap up on result day and short the stock.

B.     Uptrend over two months and a pullback / retracement into the results. Looking at a gap down on result day and long the stock.

C.      Downtrend over two months and strong trading down into the results. Looking at a gap down on result day and long the stock.

D.     Downtrend over two months and a pullback / rally into the results. Looking at a gap up on result day and short the stock.


 
Some examples. To start with the A and D short scenario's:
 
The A scenario. Facebook traded in an up trend over the past period.
 
 
The continue trading strongly into the upcoming result period.
 
 
Zooming in, we do see the gap up and the price started trading into the opposite direction.
 

 
Appel is a type D scenario, downtrend over two months and a pullback / rally into the results. Looking for a gap up on result day and short the stock. Results were released on 1 November 2018.

 
 
The B and C long scenario's:
 
NTRI has traded in an up trend over two months and strongly pullback into the results period. Looking for a gap down on result day and long the stock.
 
 
 
 
RNI traded in a solid downtrend over two months and strong trading down into the results. Looking for a gap down on result day and long the stock for a reversal on good news. Next support at 21100. 

 

After bottoming out, Spar has traded down 4 days before earnings were released. This classify SPP is a B scenario. The trade setup is to buy at the long-term trend a recent support level 16600.  Once the price has opened and traded down to the support level during early morning trading, the price turn back on good results and closed higher.



Note: The zones and percentages are only to assist myself om money management.

Trade with caution as the markets are very unstable and uncertain.
@Duplo123 or join us on Skype
 


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