Thursday, August 08, 2013

A tale of two earnings reports

Two trades that were in profit quickly came to an end this week as a result of sharp moves down following earnings releases (charts below). The question of earnings and whether to hold through them has been mentioned here before, and is really for each trader to decide for themselves. Myself, I have always kept existing positions open. One thing I try to avoid though is opening a position immediately prior to such a release.

The first is Dutch stock Post NL. This trade was opened back in May and had been in a profitable uptrend, until Monday of this week, when it gapped down and kept falling. When the stop was triggered the trade was closed for a near 7R profit.


The second ocurred yesterday with US stock SunEdison ($SUNE), which gapped down sharply, way below my trailing stop. While frustrating at not being able exit with a profit, due to my initial stop placement and position size the loss was kept below the 1R level.

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