In yesterday's post on Apple, Inc. (NASDAQ:AAPL) I told you exactly what I was going to do based on the earnings pattern I have seen historically for the stock of Apple.
From yesterday's report:
So here's what is needed to make a trade in Apple before today's earnings report is released. The position is taken the day Apple releases its earnings report.
(1) Both the weekly and monthly Trade Triangles are in sync.
(2) Take a position on the close in the direction the Trade Triangles are indicating.
(3) Exit the position the following day on the close.
Based on this strategy, you should have shorted Apple on the close yesterday at $99.99 and you would cover this position on the close today win, lose or draw.
After the close, Apple did announce its earnings which turned out to be disappointing, pushing the stock of Apple down in the aftermarket.
Tomorrow (Thursday), Amazon.com Inc. (NASDAQ:AMZN) reports earnings after the close. I have included a spreadsheet of how Amazon has performed using MarketClub's Trade Triangles in the last 12 quarters.
The same strategy I used for Apple can be applied to Amazon, which has similar metrics. Historically, an Amazon earnings strategy has seen an 80% win rate which is higher than the metric for Apple, which is 66%. Total gains for Amazon came in at $190.18 while losses clocked in at $55.81. This indicated for every dollar that was put at risk you made back $3.4. This risk adjusted return is slightly lower compared to Apple's risk reward ratio of $4.67.
So what is your strategy?
I believe to be successful in trading you must have a destination in mind, not only for yourself, but also where you believe the market is headed. This goal requires both a strategy and a game plan and with that in mind, I want you to download my "5 Professional Stock Trading Rules That will Make You Successful In Any Market!" This easy-to-read PDF booklet will provide you with a Game Plan worksheet and four other must-have tools that professional traders use every day that will help make you a more successful trader.
Let's see how Apple closes today, but early indications are going our way.
Hopefully, tomorrow I will have some video updates for you. Because of the huge snowstorm here over, the travel conditions have been difficult in many parts of our area.
Stay focused and disciplined.
Every success with MarketClub,
Adam Hewison
President, INO.com
Co-Creator, MarketClub
