Hi Traders,
Somebody’s going to ask me this week which way Tesla goes after earnings.
Then they’ll ask about Meta.
My honest answer to both is that I have no clue, and I don’t trust anyone who says they do.
Both companies report Wednesday after the close, and I won’t place a single trade before those numbers come out.
I see buying a stock or an option before or during an earnings report as gambling. That doesn’t mean you should ignore or avoid earnings. I watch every one of them, and I find my trade once the report’s out and I can see where the stock opens.
So I’m opening the doors this week.
Tuesday comes before the reports, and that’s pitchfork day.
Every time I say “pitchfork,” I want you to think “price target,” because that’s what it does for my trading. In my experience, once a stock enters a pitchfork channel, it reaches the other end about 80% of the time.
We’ll map targets up and down on both stocks. Then we’ll price the straddle on each one, which shows you how far the market makers think these stocks can move.
On Wednesday, we’ll be live when the reports come out. Earnings almost always leave a gap, and I’ll show you how I trade gaps with trendlines. A trendline marks a pivot point where buyers and sellers make their decisions.
It works because everyone who charts the stock sees the same line.
On Thursday, we’ll see where META and TSLA open and what kind of candle they print. I lean on five candlesticks: the doji, the hammer, the inverted hammer, the hanging man and the shooting star.
Each one tells me whether to enter or wait. The read gets harder when three or four of them show up back to back, and that’s where I see a lot of traders get burned.
Then we’ll put pitchforks, trendlines and candlesticks together and look for a trade as a group.
At the end of each session, I’ll send you an earnings checklist so you can run the same process on the next report yourself.
To those of you with smaller accounts, don’t let the share prices on these two scare you off. We have ways any account size can make these trades.
Trade Accordingly,
Licia Leslie