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
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
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.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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