Earnings Swing Trades are Jumping! Market Heats Up
In the last blog post I talked about the strength of Q1 estimate revisions and the big earnings swing trading opportunities coming. And over the last couple weeks we have seen huge moves on stocks satisfying our earnings trade criteria.
Its hard to argue that most top stocks make the majority of their moves around big earnings reports. So knowing how to swing trade these earnings events is key.
Last week we featured ABMD in the Weekly Alert just ahead of a massive earnings beat that sent shares skyward. In this blog post I am going to go over this trade, the different entry points and ways to let your big winners soar and how to squeeze as much profit as you can out of them.
Later I am going to show you another great setup for the upcoming week that is already off to a great start after appearing in the Daily Alert.
One of the things we noticed over the past couple weeks is that the medical equipment index was nearing the highs of the year in a stronger consolidation than the overall market. The index was in a bullish symmetrical triangle with the uptrend support beginning to slope higher.
At the same time we saw INGN, another medical equipment stock crush earnings, gap higher and hold those levels as top stocks over $10 more often do.
ABMD, in the same industry, was in a very strong long-term uptrend with terrific, consistent growth in sales and earnings. The price was in a tight flat base chart pattern and just generated a very nice, bullish candlestick pattern after testing the bottom of the consolidation.
Meanwhile, the overall market had confirmed a new uptrend and we were catching ABMD on the first market pullback after the bullish market signal. From a technical standpoint, it was a beautiful entry point.
ABMD reached the swing trading target entry point listed in the Weekly Alert the next day, pulled back about 3% and then took off after a great earnings report. We only feature stocks ahead of earnings that have the best chance of crushing expectations.
Its now up about 12% from our target entry point in just 3 trading days.
ABMD could also have been played using multiple time-frame alignment. After the earnings release, the stock gapped higher pre-market, broke the pre-market high and then the 52-week high right after the opening bell.
A close on a 1 minute chart above the prior high and then a breaking of that candle could have been further confirmation and a great entry point after the release for a quick 10%.
Since then, the semiconductor index is now rising sharply off the 200 day moving average. At the same time, the Nasdaq broke strongly out of its bullish symmetrical triangle pattern its been in over the past 3 months.
This is setting up a great opportunity on one of the top growth stocks in the market. After being featured in the Daily Alert, its off to a nice start and in the next blog post, I’ll be going over this opportunity in great detail before a potential big move later this week.