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In its entire history as a public entity, Twitter has had four earnings reports, and for all four of those, there has been a big price gap. Earnings yesterday after the close were no exception, and I was cheerfully short the stock (I thank Slopers for chattering so much about it, since it didn’t even occur to me to short the stock until you guys chimed in). One wonders if the day will come that Twitter’s earnings don’t shock the market in one direction or the other. I’ve covered.
The stock below, KeyCorp, is a good short candidate in its own right, but it’s also representative of the kind of short I’m seeking these days. It has these elements:
+ a clean topping pattern;
+ a firm drop, exhibiting that it’s vulnerable to the general weakness we saw in past weeks;
+ a hearty bounce, pushing it to a more attractive risk/reward level.
As with so many other stocks, this one has a horizontal line anchored on a gap (in this instance, at a dollar value of $12.71) (more…)
Well, pretty-much filled, anyway. I’d say the recovery is over for this one.
Bank of America had a gap of 15.93 which has been closed, to my eyes, satisfactorily. I am now short the stock and long the August $17 puts.
Interest rates have been zooming higher the past four days. I think an important level to watch is the gap on $TNX at 26.11 (that is, a rate of 2.611%). If it stllls there and starts working lower, the drop in interest rates will probably accelerate to new lows for the year.
