Welcome traders, investors, and financial enthusiasts! In today’s intriguing edition of ‘What Makes This Trade Great,’ we delve into an earnings play with Harley Davidson (HOG). Today, we’ll dissect how earnings season can impact a stock’s movement. Furthermore, we will leverage these insights to execute a successful short-sell trade. Feel free to explore my Home Page, Use Promo Code BARRIE25 for 25% off
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The Beginning of the Earnings Season

Earnings season, a period we have discussed in previous posts, has just begun. It has a significant impact on the stock market as firms release their quarterly earnings data. Today, we’ll dive into the trading whirlpool and dissect one such earnings release – Harley Davidson’s HOG.

HOG’s Performance & Trade Analysis

The company announced its earnings today, which led to some intriguing activity on the stock exchange. While the stock wasn’t much active in the pre-market trading, the scene radically changed once the market opened.

The 9:30 AM candle reflected an essential market sentiment – HOG had declined significantly. The stock’s downward movement caught our attention around 9:56 AM Eastern Time, when HOG traded at $26.66. A little later, we executed a short sell trade, banking on the stock’s continued downward move.

Here’s a snapshot of the trade moment,

The Art of Trendspotting

When it comes to trading, trends are our best friends. Before the downcast HOG got any chance to recover, it slipped below $25. That was a significant move, accounting for an impressive percentage change.

HOG did exhibit a slight uptick shortly after but did not maintain the upward trend. It capitulated to the market pressure and declined further. This price movement provides a pivotal trading lesson: always look at the trend.

You can continue to hold on to your position as long as the trend favours your trade. In our case, we stuck to the short-trade as HOG kept plummeting. Eventually, a price bump would’ve signalled the exit from the short position.

The Check-Left Strategy

“In trading, it is crucial to lookout for potential chart support or resistance. This can often help predict possible stock movements.”

Another vital trading tactic is to check left on the monthly chart. When we spot a low on the left, it does not necessarily mean the stock will reach that low. However, it indicates a possible area where the stock could potentially head.

In this trade scenario, the monthly chart low for HOG was $24. The significant detail here is that there was no chart support visible. Given this, HOG’s downward movement could have extended further, making the short-selling trade even more profitable.

Market Influence

One can’t underestimate the broader market’s role in influencing individual stocks – HOG, in this case. Given the market’s bearish trend, it undoubtedly catalysed HOG’s descent, reinforcing our short position.

Wrap-Up

That’s a wrap for today! Trading, particularly at the start of the earnings season, is a mix of strategy and keen observation. Expect the unexpected and remember, fruitful trading often lies in interpreting and leveraging trends accurately. Look out for our next post, where we will dive into another fascinating trade. Keep trading and learning!