-1689933865.png)
What is US Earnings Season?
The US earnings season, which happens quarterly, is a key focus point for traders. During this period, companies unveil their financial performance over the prior quarter, presenting comprehensive reports on revenue, profits, expenses, and forward-looking projections. The impact of these earnings releases is highly tradable, significantly influencing stock market dynamics and shaping investor sentiment.
How Does Earnings Season Impact Markets?
Earnings releases are known to introduce heightened volatility into the stock markets. The revelation of company performance that exceeds or falls short of expectations can trigger rapid and substantial fluctuations in stock prices. Positive surprises tend to inspire market optimism and buoyant trends, while negative surprises can lead to increased risk aversion and subsequent market downturns.
Utilizing Earnings Season in Your Trading
Alright, so you want to dive into the earnings action and trade stocks like a pro? Here are some tips to get you started:
Research and Plan: Before the earnings report comes out, do your homework. Check out analysts' expectations, market sentiment, and the company's historical performance. Based on your findings, craft a trading plan.
Volatility Alert: Earnings releases bring in loads of volatility. Keep your seatbelt on and get ready for some wild swings. Traders often use options strategies to hedge against unexpected moves.
Post-Earnings Drift: Here's a nifty trick: stocks tend to continue trending in the direction of the earnings surprise for a while. If a company's report is fantastic, consider going long. If it's a bummer, consider shorting.
Don't FOMO: Fear of Missing Out (FOMO) can be dangerous. Don't jump into trades blindly just because everyone's talking about an earnings report. Stick to your plan and stay disciplined.
Risk Management: Never forget the golden rule of trading – protect your capital. Set stop-loss orders to limit potential losses.
Remember, trading on earnings releases can be thrilling, but it's not for the faint-hearted. Do your due diligence, stay informed, and play it smart. Happy trading!
On Deck Today:
American Express will report its Q2 earnings today. The market is looking for EPS of $2.814 on revenues of $15.41 billion. If seen, this will mark and increase on the prior quarter and should see the stock well bid into next week. If performance undershoots forecasts, however, this should see the stock sold into next week.
Technical Views
AmEx
The market is currently moving in a rising wedge formation with 182.26 the next resistance level to note. If we reverse lower from current or higher levels, 166.22 is the main support to note. Outlook remains bullish while price holds above this level, below there 154.71 comes into view as main downside level to note.
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.