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Negative earnings reaction - earnings miss - EOD Trend PB - NEE - 25-1-23.pptx

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MaartenvanBemmel3

The miss on earnings caused a significant gap down of -4% and -2ATR. Directly when the market opened, NEE was extremely weak and sold off without a proper PB. Then it reclaimed VWAP on volume. This should have been the cue for a solid EOD Trend PB opportunity, but I missed it.

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Negative earnings reaction. Catalyst: Earnings miss Setup: Negative earnings reaction Trades: EOD Trend PB Ticker: NEE Date: 25-1-23
Bigger picture: SPY and VIX Intraday levels SPY: Gapping down 1%, there was a very strong reclaim today. Trended up from 11AM and made 1.2atr. Closed very strong near important 400-dollar level. VIX level : 19 VIX closed at 19 after popping above 20. Same as yesterday.
Catalyst & Fundamentals Catalyst: Earnings miss, small Setup: Negative earnings reaction Float: 1,98B Institutional Ownership: 80,3% Short %: 0,92% ATR: 1,90. Average Daily volume (50 day): 6 million. Daily volume: 28,5 million. Gap%/Gap ATR: -4,65% / -2,05 ATR RVOL: 4,86 during open.
Gameplan/checklist Premarket gameplan. Catalyst: missing earnings Setup: Negative earnings reaction. -3.6% the miss is not that big, for the Marketbeat consensus its a small win. Technicals: Lower ATR for a higher priced stock. Not moving that much. Has been strong but it's moving sideways mostly. Intraday notes -Very weak open -2ATR opening drive. Perhaps 77 could be a daily level. Otherwise, theres a lot of downside potential. -High elevated volume. 4.86RVOL -Got late locates available missed a possible trend PB. Would have been a very aggressive one. -Looks like its stalling out and forming a bottom. Might become a HTF PB. Post market notes -I didnt rank the stocks, but I think I would have ranked NEE number one in terms of potential. In hindsight it made the largest move. Weak catalyst + weak reaction + weak technicals + weak reaction. -When I was ready for the 5m PB it spiked and reclaimed VWAP. Lost it out of side and didnt set alerts on it. Not good!
Daily chart
Technical Analysis: Trend PB 10m is holding below 9EMA. 5m is holding below 20EMA. Pullback visible on multiple time frames: 1m, 5m, 10m. Bounce of intraday key level: 77,50 Shallow volume during PB.
Ideal trade management
What could I have done better? NEE was extremely weak during the open. It was down -2.5ATR without a proper 5m PB. I commented that such a move might be followed by a HTF PB, because I saw that the trend was stalling out in stead of pulling into the 5m 20EMA. Then NEE reclaimed VWAP after a strong push. This can always happen but doesnt change the thesis. I was focusing on MSFT, so I forgot about it. I did well to set alerts and focusing on not missing playbook trades but this one got through my fingers. I will implement a 20PM check where I go through al my stock on my watchlist again and review the potential playbook trades that could unfold. Had I done this then I wouldnt have missed it. I think its good to focus on 1 trade at the time. But when I only have a minor partial left, I should set alerts and focus on the next one good trade.

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Negative earnings reaction - earnings miss - EOD Trend PB - NEE - 25-1-23.pptx

  • 1. Negative earnings reaction. Catalyst: Earnings miss Setup: Negative earnings reaction Trades: EOD Trend PB Ticker: NEE Date: 25-1-23
  • 2. Bigger picture: SPY and VIX Intraday levels SPY: Gapping down 1%, there was a very strong reclaim today. Trended up from 11AM and made 1.2atr. Closed very strong near important 400-dollar level. VIX level : 19 VIX closed at 19 after popping above 20. Same as yesterday.
  • 3. Catalyst & Fundamentals Catalyst: Earnings miss, small Setup: Negative earnings reaction Float: 1,98B Institutional Ownership: 80,3% Short %: 0,92% ATR: 1,90. Average Daily volume (50 day): 6 million. Daily volume: 28,5 million. Gap%/Gap ATR: -4,65% / -2,05 ATR RVOL: 4,86 during open.
  • 4. Gameplan/checklist Premarket gameplan. Catalyst: missing earnings Setup: Negative earnings reaction. -3.6% the miss is not that big, for the Marketbeat consensus its a small win. Technicals: Lower ATR for a higher priced stock. Not moving that much. Has been strong but it's moving sideways mostly. Intraday notes -Very weak open -2ATR opening drive. Perhaps 77 could be a daily level. Otherwise, theres a lot of downside potential. -High elevated volume. 4.86RVOL -Got late locates available missed a possible trend PB. Would have been a very aggressive one. -Looks like its stalling out and forming a bottom. Might become a HTF PB. Post market notes -I didnt rank the stocks, but I think I would have ranked NEE number one in terms of potential. In hindsight it made the largest move. Weak catalyst + weak reaction + weak technicals + weak reaction. -When I was ready for the 5m PB it spiked and reclaimed VWAP. Lost it out of side and didnt set alerts on it. Not good!
  • 6. Technical Analysis: Trend PB 10m is holding below 9EMA. 5m is holding below 20EMA. Pullback visible on multiple time frames: 1m, 5m, 10m. Bounce of intraday key level: 77,50 Shallow volume during PB.
  • 8. What could I have done better? NEE was extremely weak during the open. It was down -2.5ATR without a proper 5m PB. I commented that such a move might be followed by a HTF PB, because I saw that the trend was stalling out in stead of pulling into the 5m 20EMA. Then NEE reclaimed VWAP after a strong push. This can always happen but doesnt change the thesis. I was focusing on MSFT, so I forgot about it. I did well to set alerts and focusing on not missing playbook trades but this one got through my fingers. I will implement a 20PM check where I go through al my stock on my watchlist again and review the potential playbook trades that could unfold. Had I done this then I wouldnt have missed it. I think its good to focus on 1 trade at the time. But when I only have a minor partial left, I should set alerts and focus on the next one good trade.