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Post-earnings trade setups: Virgin Galactic, Walt Disney, and Eastman Kodak


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With Q3 earnings season drawing to a close, Virgin Galactic, Walt Disney, and Eastman Kodak provide us with potential trading opportunities.

BG_walt_disney_4234324.jpgSource: Bloomberg
 Joshua Mahony | Senior Market Analyst, London | Publication date: Friday 12 November 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.

Virgin Galactic

Virgin Galactic enjoyed a rare boost in the early part of the week, following an earnings report that saw the space tourism firm post better-than-expected revenues and plans for their first commercial flight in the quarter four (Q4) 2022. \

Nonetheless, we saw the negative sentiment return once again in the following days, with the weekly candle largely flat as we head towards the weekend.

However, it is worthwhile noting that this positive news came as price reached a crucial area of support, with an ascending trendline coming into play in late-October. A break below trendline and $14.35 would largely negate the bullish trend in place over the course of the past two years.

With that in mind, this could be an opportune moment for the bulls to come back into play. Whether that happens remains to be seen, but the risk-to-reward perspective certainly looks appealing if we can remain above $14.35.

As such, watch out for a potential rebound from here, with a push above $24.41 bringing greater confidence for the bulls. Until then, the bearish trend does still remain intact.

SPCE-Weekly-2021_11_12-09h50.pngSource: ProRealTime

Walt Disney

Walt Disney shares have been hit hard over the course of the week, with worries over Disney+ subscriber numbers overshadowing improvements in Covid-affected areas of the business such as parks and hotels.

This has taken price back down into the $158.50 support level, with a break below that point likely to bring another leg lower for the stock.

For now, we are yet to see a bullish reversal sign despite the long-term uptrend that would ultimately favour such a position. A break up through $179.23 would bring an end to this bearish phase, but we remain at risk of further weakness until such a break occurs.

DIS-Daily-2021_11_12-10h10.pngSource: ProRealTime

Eastman Kodak

Shares in Eastman Kodak have been somewhat drab of late, with price treading water for months now.

However, this week saw them post both $8 million net income and profits of 6c per share that could help lift sentiment. Price action appears to have been forming a basing pattern over recent months, but there is a good chance we see price break higher before too long.

A rise up through the $7.44 and $7.82 levels would bring greater confidence of such a breakout, with investors hoping to see another run higher after a period of low volatility.

KODK-Daily-2021_11_12-10h08.pngSource: ProRealTime
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