Post-earnings trade setups: Delta Air, Just Eat, and Persimmon

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.

Delta Airlines

Delta Air enjoyed sharp post-earnings rise on Thursday, with the stock hitting a 10-month high. However, we have seen the stock turn lower in the two days since to close the gap. Set within a eight-month recovery, this looks to be just the latest leg in that trend. With that in mind, this subsequent pullback could provide us with yet another buying opportunity. The one risk for a potential reversal comes from the fact that price has respected the 61.8% Fibonacci resistance level perfectly. Nevertheless, a bullish outlook holds unless we see a break below the $37.17.

Just Eat Takeaway.com

Shares in this food delivery service have slumped over the course of the week, with the firm opting to pump funds into expanding market share rather than earnings. The Daily chart highlights the consolidation seen over the final three quarters of 2020, with the stock held back by the perception that earnings will return to normal post-Covid. To the downside, the $75.18 support level is key here, with a breakdown below that level raising the potential for a wider bearish reversal for the stock. However, it is likely that we will soon see the stock steady itself after these losses. As such, watch out for a potential stabilization or rebound around that $75.18 level. A break below there would raise the risk of a significant selloff.

Persimmon

Shares in this housebuilder have enjoyed a positive end to the week, coming off the back of a period of weakness that took us back into a confluence of trendline and 6.18% Fibonacci support. With a clear uptrend in place, this could be the beginning of another bullish phase for the stock. As such, a bullish outlook is in place here, where a break below £24.33 would be required to bring about a more bearish view.