Some believe playing earnings is a crapshoot. After all, there really is no edge to this short term game, right? Or is there!?
As a technician, I will let the charts/technicals tell me when it’s time to enter/exit a trade. Interestingly, the charts are not a calendar and do not respond to the clock. All we have to go on is past performance and patterns which are the guide to future moves. We can see past instances of stock movements post earnings but it is the activity leading up to the event that really gives the best clues. It’s not a perfect science, but then again who owns an accurate crystal ball?
A TALE OF TWO STOCKS
This past week or so saw the release of IBM and Boeing, two Dow Industrials. Predictably they had sharply different responses to their earnings, IBM tanking hard while Boeing shot higher. If you were paying attention to the signals from the technical side you could have seen this coming and made an argument for bearish IBM and bullish Boeing, making money on both sides. Take a look at the charts below.
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WEBINAR
Lang will discuss these and other strategies in an exclusive Trader Planet webinar on April 30 after the close. Learn how to navigate with options during earnings or any other time. Sign up here for this free webinar.
