Come learn how I find trades AFTER an earnings gap.
Notes: Finding Post-Earnings Trades
- Earnings announcements are catalysts for new trends. They can be a gift that keeps on giving.
- More likely we get breakaway gaps or runaway gaps than “gap n crap.”- Market rejects the earnings move and it fully reverses, in other words.
- Most compelling earnings gaps are those that break major resistance. It catches bears off guard.
- Bull Trade Timing
- Enter on the day of the gap if we get signs it’s continuing. Intraday chart continues to show strength. Trigger Idea: Buy above 5-minute high.
- Wait for secondary patterns. Buy the first pullback, buy the first flag, buy the first breakout after a pause. They’ve all seen INCREASING MOMENTUM on their uptrends.
- Strategy Selection
- Aggressive: Higher reward/lower POP = bull call spread
- Conservative: Lower reward/higher POP = Bull put spread/Naked put with scaling in
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