Looking ‘Outside The Box’ In Wild Market

2021-02-17

Considering a year-long pandemic and current world economies — and severe winter weather affecting one-third of the U.S. — what is there to look forward to in the market?

Plenty.

It’s all about where you’re looking.

Today’s market climate may require looking outside your personal “box” for profitable trading opportunities.

One “zone” of potential trades is a run into earnings. Earnings aren’t limited to quarterly seasons, i.e. January, April, July, and October. Many companies report earnings at different times throughout the year, so there are hundreds of run-ups to earnings outside these seasons.

A simple strategy is to find a company with an earnings report from six weeks to four weeks ahead of today. (Two weeks out is by many standards too close). Simpler’s traders generally don’t hold through the earnings report. This would be considered a “lotto” trade with more risk involved.

The target for earnings is a ticker moving higher in price with strong signals — volume and price — to maintain the uptrend. Finding this trade six to four weeks away from the report allows time to plan and manage the trade as profit potential develops.

Managing an earnings trade in this “zone” allows traders to target a trade for gains while limiting risk.

Finding earnings trades, or any trade, comes from researching the market, sectors, and tickers to find an asset that provides confidence in its potential for profit. Confidence from the research leads to conviction that the trade has a higher possibility for profit.

Simpler’s traders can follow this strategy to step outside their personal “box” and still have confidence and conviction they are trading in a way that fits their overall plan.

We Saw: Hints of a slowing economy — 

  • Fed voices concern over economic growth
  • Severe weather continues to affect energy markets
  • Another flat day across the board

We’re Watching: Strength of upward trend in short term —

  • Longs struggling to hit targets
  • For tickers with strength into earnings
  • What’s on the table and where to take gains