This post is not directed at those who are enjoying great wins in TSLA, post-earnings, as it is those who are beating themselves up for not betting big on the stock into earnings (or GMCR, for example). For every one short squeeze you see in Tesla after earnings, there are plenty of other times where even a strong chart deceives you before earnings and you wind up in a bull trap.
Such appears to be the case with LinkedIn. And while we may not see a full-blown breakdown on the daily chart, below, there is no doubt that longs from above $200 find themselves trapped.
As I like to say every weekend in my Strategy Session about earnings plays:
Keep in mind, there are plenty of different styles that can be profitable in the market as a trader. My discipline is to usually not hold trades through earnings reports. If you do want to hold a position through the firm’s earnings report, I would suggest that you consider lightening up the position a bit before the announcement in order to mitigate the known unknowns/risks you are assuming.
Either way, I urge you to check and then double-check your current portfolio holdings to see when the firms you own are scheduled to announce earnings. As a swing trader, I am almost always looking to significantly reduce or outright close a position into earnings. There are simply too many external variables, particular to the firm in question, from an earnings report for me to have an edge. As an example, even if you do possess some type of insider or unique information about a given firm’s impending earnings report, there is still no way to know how the market will react. Stocks can just as easily sell-off on great earnings as they can on horrific ones, and vice-versa.
In sum, there are two sides to making the big prayer or bet into earnings. At a minimum, consider reducing position size to mitigate wild swings.
_____________________________________
http://youtu.be/4IXmHqPWxUw 😉
Ha!
:)))
Would you short LNKD?
I think it is short-able below $174, yes.