Bang in the middle of earnings, last week saw a sloppy Thursday and Friday with a number of stocks suffering severe retracements, some hitting support levels and some gapping down on their own earnings reports.
That said, the number of bull flags dramatically outnumbers the number of bear flags, and that is a bellwether for tradeable setups.
Indeed, if you look at the pre-earnings stats they correlate rather well with post-earnings, in that the majority of bullish pre-earnings setups have been manifesting in positive earning reactions.
That’s great, but given the world situation that could throw a curveball with zero warning, it does seem a bit iffy to play pre-earnings too aggressively right now.
So, given that there are still many stocks to report, what should you do?
The answer?
GET TO YOUR HAPPY PLACE OF TRADING!
What do I mean by that?
Simple … Post earnings OVI consolidations, especially those that are displaying our key ‘Big Money’ markers.
Add a dash of a reverse head-and-shoulders type setup (suggesting a drying up of selling activity for bullish setups, and vice versa for bearish setups) then you really are in an optimal and low risk place.
What about pre-earnings?
Given that pre-earnings OVI setups are doing very well, why not have a go at these too? Well, I’d still be cautious as we do live in strange times as I alluded to earlier, but if you are one of those higher octane types, then you would only do so based on confirmed breakouts. Don’t fall into the Intel trap.
Frankly, there’s plenty of fun to be had with post-earnings setups, and at this time, right in the middle of earnings, that’s my happy place.
Today’s OVI Market Review covers plenty of stocks setting up well, in addition to recent big winners, and recent cautionary tales!
