Planning for Upcoming Earnings (NFLX, IBM, etc.)
Yesterday, we created a game plan around trading United Health’s earnings (UNH). We said, if UNH gapped up, then probabilities suggest that UNH tends to continue in the same direction for an average of ~$4.35.
UNH did just that today – and we ended up continuing in the bullish direction for almost $6.98 from the open.
Discussion for UAL is available in yesterday’s post, here.
Below are some interesting statistics around earnings (using 2-yrs worth of earnings data) for tomorrow:
- ASML Holdings (ASML) – Gap N Go (Bullish) 50% of the time
- CSX Transport (CSX) – Gap N Go 75% of the time on earnings beat
- International Business Machines (IBM) – Gap N Go 87.5% of the time
- Netflix (NFLX) – Gap N Go 62.5% of the time
- Crown Holdings (CCK) – Fills its gaps (Bearish preference) 87.5% of the time
- Crown Castle (CCI) – Gaps down and fills its gap 75% of the time on earnings beat
Trade Plan & V-Score Targets
Below are some price targets, based on if the pattern that tends to happen repeats itself, and we get a move in the direction towards our bias.
The price targets are derived using the closest standard deviation, with the V-Score indicator.
|Ticker||Preference||Bias||Earnings||Avg $ Move||Nearest SD||Nearest +/-1 SD|
|UAL||Gap N Go||Bullish||–||$ 2.01||$ 90.33||$ 91.29|
|UAL||Gap N Go||Bearish||–||$ 5.09||$ 86.18||$ 82.02|
|ASML||Gap N Go||Bullish||–||$ 3.80||$ 270.29||–|
|CSX||Gap N Go||Bullish||Beat||$ 1.85||$ 70.51||$ 72.23|
|IBM||Gap N Go||Bullish||$ 3.48||$ 153.39||$ 163.95|
|IBM||Gap N Go||Bearish||$ 2.66||$ 138.49||$ 131.68|
|NFLX||Gap N Go||Bullish||$ 4.43||$ 292.94||$ 319.41|
|NFLX||Gap N Go||Bearish||$ 3.20||$ 245.47||$ 207.62|
|CCI||Gap Down Fill||Bullish||Beat||$ 134.57||$ 153.13|
To be clear, we are looking for CCI to gap down, and then fill its gap, therefore leading to our “bullish bias,” despite a gap down.
Day Trading Brexit Deal News
In tonight’s video, we discuss a new rule that we added to our trade plan, as a result of seeing a continuous pattern after “Breaking News” events.
The rule is as follows:
If we have a Forex Factory news event, that is deemed to be considered “Breaking News” and “Important” (denoted by a red folder icon), then switch over to the Conservative Volatility Box.
We had a total of 5 trades that set up today, for a net P/L of -$1,925.
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