Contenu connexe

Similaire à Positive earnigns reaction - Earnings miss- Trend PB - NFLX - 20-1-23.pptx(20)



Positive earnigns reaction - Earnings miss- Trend PB - NFLX - 20-1-23.pptx

  1. Positive Earnings reaction Catalyst: Earnings miss Setup: Positive earnings reaction Trades: Trend PB Ticker: NFLX Date: 20-1-23
  2. Bigger picture: QQQ/SPY and VIX SPY & QQQ SPY and q’s both had small range days and held below the 50SMA. First sign of weakness. Currently they are gapping up 0.3%, 2 points from yesterday’s low. Both stocks reclaimed the 50SMA and trended all day. VIX level : 20. VIX opened around 20 which means we’re in a high volatility environment.
  3. Gameplan 2) What are potential setups. What are the playbook indications & statistics I have for these setups? Compare. Does the setup match the catalyst? How does this setup compare to your other playbook setups, grade/rank them. Difficult to rate the catalyst after seeing multiple data/ opinions. Shortbear hints that the media is overreacting. Seen other data that didn’t look great. But the increase in subscribers is strong. The market is reacting positively premarket. A very big gap. But the last earnings gap was bigger and closed green, but then earnings were positive. NFLX has been very strong the past 8 months. Setup could be a reversal gap up. That’s an UAL kind of setup. There we had an earnings beat, gapped up but traded down. This was market related, and this ticker was very extended. Not really the same setup, because NFLX didn’t go parabolic. But we were strong, so today could be a big red day. It could be the reversal of yesterdays setup on PG. Had decent news, gap down and pushed to the previous day lows. We could have that scenario today and I would want to look for trend trades to capture. If the market sees that catalyst truly positive, and the market is aligned. We could have a really strong day the upside and push towards the upside of channel were in, perhaps to 350- 355.Then we could have a strong earnings play like DELL. Or we could have a smaller green/red day after this gap, where the market is a bid indecisive. I think the most likely scenario is a gap up reversal setup. This would mean that the market has overreacted to the catalyst. We’re not extremely extended, but we can trend down.
  4. Catalyst + Setup + Trade Catalyst + setup -We have a positive earnings reaction (strong gap up) that isn’t matching with the earnings miss (catalyst) If we had an earnings beat, I would have higher conviction in a strong move. The catalyst wasn’t entirely negative, there were some positive aspects and therefore it was hard to form a strong bias. -The volume was very strong premarket: 8% volume buzz. -The technicals are very strong. We are within an uptrend channel, but still had plenty of room to trend within this channel. Trade that fits this setup. Range day In hindsight, the price action we got most of the day fitted the match of the catalyst and setup: choppy and indecisive. We formed an OR of 1 ATR and traded within this range all day, most of it below VWAP. I did a good job identifying the key levels where this setup would be a good long and short. It traded within this levels most of the time. Trend (PB) trade But EOD reclaimed VWAP and increased volume. SPY started a strong trend as NFLX started to trade towards, and later reclaim, VWAP. The strong market was an important factor. The lack of strength and weakness made that only trend PB’s trades were a possibility. This is not going to HOD very likely, but should be able to structure a 3RR trade here.
  5. Catalyst & Fundamentals Catalyst: Earnings: huge miss on EPS 0.12 vs 0.46 expected.. They have a CEO change. They see resuming share buyback program. Big increase in new subscribers. Setup: Positive earnings reaction. Premarket pre buzz: 8% Float: 438 million. Institutional Ownership: 80% Short %: 2,11% ATR: 11,56. Average Daily volume (50 day): 9,1 million. Daily volume: 28,4 million. Gap%/Gap ATR: 6,46% / 1,77ATR RVOL: 7.
  6. Daily chart NFLX is in a strong up trend channel, the top of this channel would be 355 about a 2ATR move. Yesterday we saw significant selling into the earnings day. The volume in this uptrend has been very strong, but yesterday was the weakest day. This might be a clue that big players are selling. Large gaps, even larger than today are not uncommon. Probably those were earnings days. With a positive catalyst they made big move to the upside. But this only tells me that the larger gap doesn’t mean we can’t move more to the upside.
  7. Key levels Premarket support around 333 is important. Below we are likely to have a gap up reversal setup. This is the infliction for this setup. It’s also a very important HTF level. -Then I would look at to trend towards 325 yesterday’s HOD or even 315 yesterday’s close if we’re extremely weak. -Above premarket 333 and premarket high 339 we could have a strong move in the direction of the gap; up. The I would look at 350-355 for resistance.
  8. Trend PB - Trade2hold – Trade Management Trade2hold - Flat Significant 5m close above 20 EMA: 1) close on above average buying volume; 2) a new 5m high that occurs after close; Goal: don’t sell more than 50% when going flat. Reason2hold -Shallow volume and making lower highs. Sometimes the trend is still intact when there’s a significant close above the 5m 20EMA. Trade2hold – Exit strategy -Sell into strong close. -Time factor: take profit into strong push before the close. Trend PB Entry: After price pulled in 5m 9 or 20 EMA and after a top has formed on tape: -We can’t trade lower. -Tape starts to get stronger. -Bids are stepping up. -Stronger offers get taken out. Risk: At the bottom of the pullback.
  9. Technical Analysis: (HTF) Trend PB 10m holds above 9EMA, 5m holds above 20 EMA. Shallow volume during PB Pullback visible on multiple time frames: 1m, 5m, 10m. Bounce of key level: 339 Elevated volume when PB starts to work.
  10. What could I have done better? • On setups that don’t fit the catalyst well it’s still possible to have trend trades! Even when the price action is chopping around below VWAP a bullish trend PB is still possible. Set alerts! I should have set different alerts: -Price level: 339. This was premarket high, and my infliction area for long setups. - VWAP. Always important to set an alert on these types of days to spot an CHOCH early. -Volume candle that is doing above average volume. Is extra confirmation for strength, weakness or CHOCH. These alerts I can also use for my exits on trades2hold. Only when an alert triggers, I can sell. This is something to systemize and I could work on holding longer. • I should implement a noon checklist that I can use to set alerts. I can use this also to gameplan potential EOD trend trades. I have missed plenty of setups last week because I wasn’t ready and didn’t adapt. Using this checklist, I will be more proactive for potential playbook trades. And I will miss less.