Post-earnings trade setups: Ryanair, Severn Trent, and easyJet

​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.

Ryanair

Rather predictably, Ryanair has suffered over the course of the past year. With an 81% decline in traffic, this full-year report provided a continued theme of suffering as the airline reported a net loss of €815 million. Nonetheless, with bookings starting to gather pace, shareholders will hope that the second half of 2021 could see the firm turn a corner. The daily chart highlights how this recent retracement has taken us back into a zone of trendline and Fibonacci support. The existence of that ongoing uptrend highlights how we are likely to once again resolve towards the upside from here. As such, bullish positions are favoured unless price falls back below the £15.00 swing-low.

Severn Trent

A somewhat mixed bag for Severn Trent this week, with the water utility firm beating estimates on revenues, yet falling short on earnings. However, what makes this stock interesting is the fact that we have seen price return to the crucial resistance level of £25.35, representing the source of three market reversals in the past eleven months. As such, the reaction to this level should provide a strong indicator of where we go in the coming weeks.

easyJet

easyJet earnings were always going to have a relatively low level of expectations given the difficulties experienced throughout the industry. However, while the firm beat estimates on earnings, we have seen little sign of upside in the share price since. Nonetheless, the daily chart highlights how this latest pullback could represent a good buying opportunity, with price falling back into the 76.4% Fibonacci support level at £9.35. A break below £8.86 would be required to negate the view that this current move lower is a retracement and precursor to another push higher.

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