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Post-earnings trade setups: Bellway, Tesla, and Barclays​


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Post-earnings trade setups: Bellway, Tesla, and Barclays

With Q3 earnings season in full swing, Bellway, Tesla, and Barclays provide us with potential trading opportunities.

BG%20Tesla%201.jpgSource: Bloomberg
 Joshua Mahony | Senior Market Analyst, London | Publication date: Friday 22 October 2021 

This article looks at some of the big movers off the back of recent earnings announcements, as we try to find stocks that provide potential trading opportunities.

Typically, earnings announcements and trading statements will drive a shift or enhancement of market sentiment. While many see earnings as a significant risk when holding a stock, placing trades in the wake of such events allows for greater confidence that all market knowledge has been factored into current prices.

Bellway

Housebuilder, Bellway enjoyed a welcome 72% jump in pre-tax profits for the year to July.

However, rising fuel costs and a shortage in delivery drivers has provided fears over further upside for building materials. Those factors remain a key issue going forward, with price falling back down towards a confluence of trendline and 61.8% Fibonacci support.

While we could see further short-term downside, it makes sense to look at the wider uptrend and recognize that there is a good chance that this recent selloff represents a buying opportunity. That bullish trend holds unless price breaks back below the February low of £27.76.

BWY-Daily221021.pngSource: ProRealTime

Tesla

Tesla managed to beat market expectations across the board, with supply chain concerns doing little to dampen sales.

Chip shortages and higher costs across other materials were widely expected to hamper performance, but instead we saw a record $1.62 billion profits in the third quarter (Q3). This has helped drive the stock back up into the critical $900 record high established back in January.

A break up through this level looks likely to leverage the stock into a fresh bullish phase, with the company clearly managing to finally overcome market expectations after years of missed targets.

TSLA-Weekly221021.pngSource: ProRealTime

Barclays

Barclays has enjoyed a welcome boost from its investment banking division, with the Q3 profits of £1.45 billion coming in well above the £931 million expected.

This has taken the stock into a fresh four-year high, with price looking to have finally brought a long-term downtrend to an end this year. This week’s push higher builds on the exit from a seven-month period of consolidation, with price looking to build on the March breakout.

With that in mind, Barclays looks primed for a period of strength, as higher interest rates and a growing economy build a favourable outlook for the bank. A move back below £1.55 level negates that view.

BARC-Monthly221021.pngSource: ProRealTime
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