Post earnings trade setups: G4S, 888 and Just Group

This article takes a look at some of the big movers off the back of recent earnings announcements to try and find stocks that seem to provide a good trading opportunity. Typically, earnings announcements will drive a shift in market sentiment, allowing for a long-lasting trend to take hold off the back of the announcement. However, we also can see earnings figures drive a stock into particular reversal points, once again providing us with an opportunity to fade that initial market move based on technical. As such, the aim is to reflect on the impact of these announcements from a technical perspective rather than a fundamental one. After all, price is expected to reflect all relevant knowledge currently available.

G4S

G4S shares have lost ground over the course of the week, with initial gains turning lower as the wider bearish trend kicks in. The company has lost 40% since the July 2017 peak of £3.25. Interestingly, the weakness seen over the past fortnight has provided us with a new sell signal, negating the creation of higher lows in place over the past four months. Given the wider bearish trend in place over the past 19 months, further downside looks likely from here, with a break above the £2.16 swing high required to negate this bearish outlook.

888

Shares in 888 have also declined over the course of the week, gradually building on the bearish breakdown seen last Thursday. The wider trend is clearly a bearish one for the firm, losing 49% over the past ten months. As such, with a bearish long-term trend in play, the break below £1.67 provides us with a renewed sell signal for the firm. As such, a bearish downturn is expected from here, with a rally through last week’s peak of £1.81 required to negate this bearish outlook.

Just Group

Yet another bearish story in play here, with Just Group having lost ground over the course of the week after a dramatic sell-off overnight. The rising wedge pattern coupled with the wider bearish trend always pointed towards a likely breakdown before long. That appears to have finally taken shape, with further downside expected before long. The rebound we are currently seeing should not be a problem for that outlook, with short-term upside providing a better selling opportunity. Only a break through the £1.10 peak would undermine the bearish outlook for the firm.