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Post-earnings trade setups: Dollar General and easyJet


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Post-earnings trade setups: Dollar General and easyJet

With a somewhat thin week of earnings, Dollar General and easyJet provide us with potential trading opportunities.

BG_easyjet_e456456.jpgSource: Bloomberg
 
 Joshua Mahony | Senior Market Analyst, London | Publication date: Friday 03 December 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.

Dollar General

Dollar General shares have slipped over the course of the week, despite an earnings report that brought stronger-than-expected third quarter (Q3) earnings, and an upward revision to the full-year sales outlook.

Nonetheless, with wider market weakness, we are seeing traders question demand in the event that Omicron drives business closures. The weekly chart highlights how price has dropped back into the lower boundary of a standard deviation channel.

A break below trendline and $203.88 support signals the potential for a bearish reversal phase. Until then, the bullish trend points towards a possible upward turn from here.

DG-Weekly-2021_12_03-10h34.pngSource: ProRealTime

easyJet

Airlines have seen a volatile week, with earnings coming just as traders are worrying about the potential implications of the Omicron variant.

While profits fell short of expectations, the airline did manage to beat predictions for revenues. The stock managed to regain some ground following the collapse late Friday.

However, the bearish trend down remains in play unless we see price rise through the £5.71 and £6.63 levels. To the downside, a break through the October 2020 low of £4.58 would point towards a bearish continuation.

EZJ-Daily-2021_12_03-15h45.pngSource: ProRealTime
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