Post earnings trade setups – Petrofac and Nike
While earnings season is easing off, Petrofac and Nike provide us with interesting trading opportunities from a technical analysis perspective.
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, the price is expected to reflect all relevant knowledge currently available.
Petrofac shares have been declining throughout the fourth quarter (Q4), following a rally into a 200-day simple moving average (SMA), trendline and Fibonacci resistance (61.8%). The break below 512 signaled an end to the rally that lasted around a year from mid-2017. With price action seen over the course of this week providing somewhat indecisive, it makes sense to expect a continuation of the sell-off that has been in play since the 2012 peak.
Nike has been rebounding since their earnings yesterday, with the deterioration seen throughout recent months coming into question. We would need to see a break through the 7900 mark to negate this downtrend, with a good chance that this current rally is merely a retracement before we see the price turn lower once more. With that in mind, keep an eye out for Fibonacci resistance at 7423 and 7604 for potential reversal points.
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