In this example I am showing you how the market remembers important price levels and how you want to trade around them.
What I am showing you here is the levels where EARNINGS were reported. I have my own special way to graph that so you can see it easily without any trouble. You can see the "earnings" tab at the bottom of charts here at TradingView. If you can't see them, click on the "format" button, then look for "Events" and you can add "Dividends", "Splits" and "Earnings" to your chart. You can also add "earnings breaks" that will draw a vertical line on the day of earnings. It is very handy.
Earnings release dates are important since that is when the world is focusing on that stock: The company is updating guidance on future quarters, analysts are listening in and then advising their clients on what the prospects are for the company and traders are listening in trying to jockey ahead of customer order flow and investors are piling in.
What happens AFTER that earnings release is the market REMEMBERS that level. So, it becomes HIDDEN to our view unless the stock gapped up or down or had a big range of trading. But what we want to do is to know what the trend of the stock is and buy pullbacks to the earnings level if it is an uptrend or sell rallies to the earnings level if in a downtrend. It is really as simple as that.
The risk you take is always a matter of preference and I recommend have a stop no further away than 3 times an average daily range away from your entry. An average range can be 11-days and that will work just fine. We don't want to get caught in the small moves that can shake us out since we are dealing with an important price level.
This is unique information and this strategy will not last forever once everyone else knows about it. I am sharing it here because I simply can't take all of the trades myself and I'd like to hear about how you have made your fortune with this methodology. It's my way of "paying it forward". I've been very blessed in my life and I've been very thrilled to be a part of helping others learn how to trade better and trade in a way that makes sense. Putting fundamentals together with technical analysis is in my blood ever since the 1987 stock market crash made technical analysis credible to the world.
Feel free to post your charts here on this thread and join us over a "Key Hidden Levels Chat Room" at TradingView and join in the trading.
Subscribe to my indicator package KEY HIDDEN LEVELS $10/mo or $100/year and join me in the trading room KEY HIDDEN LEVELS here at TradingView.com
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