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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

Post-earnings trade setups: BP, Amazon, and eBay

With Q4 earnings season in full swing, BP, Amazon, and eBay provide us with the interesting trading opportunities.

This article looks 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 and trading statements will drive a shift or enhancement of market sentiment. While many see earnings as a significant risk when holding a stock, placing trades in the wake of such events allows for greater confidence that all market knowledge has been factored into current prices.

BP

BP shares were hit hard this week, with dramatic losses overshadowing the 11-month highs in crude. That decline has taken us back into the crucial £2.51 support level, with the reaction to this level likely to provide a key indicator of where we go from here. With the stochastic turning upwards after reaching the most oversold level seen in four months, there is a good chance that momentum is about turn here. Ultimately, the reaction to this level should set the tone for the coming period, with a rebound looking most likely over the short term.

Amazon

Amazon has been an obvious benefactor of the pandemic, with shopping habits shifting in favor of online sales. The recent consolidation phase does highlight a move in focus towards recovery stocks rather than the 2020 outperformers. Nevertheless, while some benefactors may worry that their bounty is set to diminish when things return to normal, it is likely that Amazon will continue to dominate. The current shallow uptrend provides a good trading environment, with further upside looking likely as we move forward. A break back below the $3183.56 support level ending this current intraday uptrend.

eBay

eBay shares hit a record high this week, continuing the uptrend seen throughout much of 2020. While that initial surge has been partially undone on Thursday, that arguably provides a better entry for longs. With price having respected that previous breakout level as new support, further upside looks likely from here. As such, a bullish view holds unless price breaks below $55.33 support.

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