Our Favorite Exit Strategy for Explosive Earnings Breakouts
SEZL recently reached the exit signal we like to use for the most explosive earnings breakouts each quarter. The exit strategy is discussed toward the bottom of another free blog post covering when to exit a swing trade.
The exit strategy is waiting for a test of the 20 EMA, a rebound off that area, and then sell it once it breaks a prior days low during the next rally. This would have yielded a more than 100% profit within several weeks on SEZL. The stock later fell below that exit point.
Looking back at the biggest earnings breakouts over the past few quarters, we can see this exit strategy would have worked well over and over again. Sure, you can hold the trade longer but the average gain per week tends to fall off dramatically after that point.
Its important to keep these super stocks on your watch list for more bullish technical patterns. For instance, SEZL later made a nice move out of another high tight flag after the sell signal mentioned above.
When to Use This Exit Strategy
Those using the rapid account growth course are going to run into situations where a stock soars 15% to 30% or more within a few days after a big beat and raise quarter. The ones that get off to an exceptional start out of a good chart pattern on a daily chart is where we want to use this exit strategy while taking a little off into strength in the first wave higher.
We can even add back to the position on a bullish candlestick pattern after a pullback to the 20 or 9 EMA.
Waiting for a test of the 20 EMA, a rebound and then a break below a prior days low before selling is something to use on the best growth stocks that have a very strong initial move right after the earnings report.
As with everything we discuss on the blog, its not a good idea to apply these strategies to penny stocks or stocks under $25 in general. They tend to have a lower win rate, crash suddenly and have other risks we just do not see in the higher quality growth stocks.
In some cases we like to use the 9 EMA instead of the 20 EMA if the stock is moving quickly to levels that just do not make sense for that particular stock. If the stock goes parabolic, its a good time to think about selling some into strength and the rest on a break of a prior days low.
Some Good Examples of How to Clean Up During Earnings Season
In the following video we go over some of the biggest winners in the daily and weekly alert service over the past year. It doesn’t always work, but you can see how this simple strategy can capture a big profit before a larger consolidation phase for the stock.
Free Article on Our Top Strategies for Rapid Account Growth
Great Swing Trading Exit Strategy for the Top Earnings Breakouts
Free Article on How to Make Money on Earnings Reports
Deal on Our Top 2 Strategies for Rapid Account Growth
