Hey there, VWAP Legion!
I was back briefly on Friday, following a two-day hiatus, which is why you saw a healthy rebound in the markets (I am the center of the universe, don’t forget)…
However, as I warned you, I’ll be OUT ALL THIS WEEK – which is why I went to mostly CASH before my vacation.
Don’t worry, though – you VWAP addicts can get your fix by keeping an eye on your inbox, where I’ll continue to drop regular Knowledge Bombs and update you on stocks on my radar this earnings season.
I’m also going to try and make my regular cameos on the Money Morning LIVE set from the beach this week, assuming my connection holds up, so be sure to tune in at 8:30 a.m. ET each day!
That said, on Friday’s broadcasts, we discussed a few stocks that were on my daily Warlock Watchlist, including “psycho stock” Galectin Therapeutics (GALT)…
We also discussed Peabody Energy (BTU), which is a name that’s been on my rolling watchlist of Go-To VWAP Stocks for some time now… (You can now find those names right here on my site; these are stocks I’ve been circling on and off for VWAP day trades lately, and I’ll continue to update this list as necessary.)
But another big part of building my watchlist each day comes from the earnings calendar, which is how jeans maker Levi Strauss (LEVI) popped up on my radar ahead of the bell on Friday.
And following Friday’s LIVE 9:30 a.m. ET show, LEVI demonstrated perfectly why earnings stocks are ripe for VWAP day trading on both the long and short sides – and why this pattern should be on your radar this week and beyond.
LEVI: A Lesson in Earnings Patterns
Let me break this baby down for you, step by step, so you know what kind of GREATNESS you’re actually witnessing here.
First, we saw the classic fade through the 1-minute VWAP (blue line) to the multiday VWAP (yellow/orange dotted line) out of the gate Friday morning, which presented an opportunity for nimble short sellers…
LEVI broke the 1-minute VWAP early after earnings Friday
Then, hot-fingered VWAP traders had a second, even BETTER opportunity to short LEVI after it retraced to the 1-minute VWAP and pulled back, giving us the classic 1-MINUTE MULTI-DAY VWAP REVERSAL (sing the song loud and proud!).
LEVI couldn’t break back above the 1-minute
The shares then blew past their multiday VWAP (dotted line) and previous lows, which is often a warning sign (it was for the QQQ!), before dropping about another point.
THEN, ladies and gentlemen, we saw what I lovingly refer to as the “buttcrack bottom” – that W-looking formation circled below.
Those of you who’ve been following me closely know this pattern often acts as a signal that it’s time to be on the BULLISH side of the day trade. You can see that, once again, the pattern didn’t disappoint.
The irony of Levi’s stock making a “buttcrack” formation was not lost on me
By midday, LEVI was breaking back over the multi-day VWAP.
GROUNDHOG’S DAY, baby!
All of this just goes to show that even with a VERY short list of companies reporting earnings on Friday, we managed to find VWAP trading opportunities on a single stock!
So, can you imagine all the opportunities we’re about to see with earnings season upon us?!
Don’t tell my wife, but I can’t WAIT to get back from vacation and trade with you again…
Until then, keep an eye on that inbox, and I might just see you at 8:30 a.m. ET tomorrow morning on Money Morning LIVE…
One response to “3 Classic VWAP Signals on 1 Earnings Report”
July 12 2021