Post-earnings trade setups: Johnson & Johnson, JP Morgan Chase, and JD Wetherspoon

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.

Johnson & Johnson

Johnson & Johnson (All Sessions) is on the rise after significant losses earlier in the week. That pullback took us into another deep retracement, set within a recovery phase seen since the mid-September lows. With that in mind, another move higher looks likely from here, with a break back below £145.47 required to negate that bullish view. To the upside, another push into the $156.62 region looks likely as the stock seeks to create a fresh record high ahead of a second round of UK lockdowns.

JP Morgan Chase

In a week dominated by US banks, JPMorgan Chase & Co (All Sessions) has pulled back from the key $104.21 resistance level following a peak on Thursday. That $104.21-105.78 resistance zone is going to be key in a bid to exit from this recent multi-month consolidation phase. Until that break occurs, there is a chance we could see another pullback from resistance. With the 200-day SMA also coming into play here, the reaction to this crossroads will be key in determining ongoing sentiment.

JD Wetherspoon

News of increased restrictions on socializing have hit the JD Wetherspoon stock hard this week, with today’s earnings providing the cherry on the cake of those losses. This puts the stock on track to continue the downtrend seen since the June peak. With that in mind, further downside looks likely, with a break below the £7.52 level likely before long. How far we go beyond that support level remains to be seen, yet further losses do seem likely as the chain heads for further turbulence.