Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Stocks

Key Strategies To Improve Your Trading Performance

by July 31, 2022
July 31, 2022
Key Strategies To Improve Your Trading Performance

I love earnings season. New information abounds and the stock market is constantly trying to reprice thousands of securities based on this new data. It creates periods of temporary imbalances in supply and demand, which leads to a very inefficient market in the short-term. Put another way, we can make LOTS of money if we do our homework. The problem thus far in 2022 is that we’ve been in a cyclical bear market. Good news from earnings has mostly been ignored as nearly every stock, outside of energy, has suffered from the anticipation of higher inflationary pressures and uncertain economic conditions.

But that is changing this earnings season and the S&P 500 fully priced in those inflationary and recessionary concerns. Current technical conditions are confirming the market bottom from June 16-17. As earnings season kicks into full gear, we are going to be inundated with opportunities. As interest rates continue to fall later in 2022, growth stocks will explode – particularly those that report strong results and raise guidance. The gaps created by these strong reports will likely be tested during profit taking episodes, so if we do our homework and are patient, opportunities for excellent reward to risk trades will increase significantly.

One example is General Mills (GIS), which is a consumer staple name. After posting much-better-than-expected revenues and EPS, GIS gapped higher on June 29th and hasn’t looked back:

Note that the GIS post-earnings volume was the heaviest of the past 52 weeks. That’s the imbalance of demand (vs. supply) that I discussed earlier. When everyone wants to buy, market makers must take short positions to provide liquidity to the market. That normally results in prices returning to prior day’s closing prices (gap fill). But when market makers are on the short side and prices continue rising, that suggest tremendous demand. For me, it simply becomes a matter of timing an entry. I want to own stocks that create insatiable demand. Now keep in mind that GIS is a consumer staple stock that isn’t going to typically make huge runs in either direction. It generally will move much slower than say a volatile growth stock. However, profit opportunities on defensive stocks still abound too.

It’s also important to note those bottom panels in the chart above. GIS is showing excellent relative strength vs. its food products peers and has been outperforming the S&P 500. This is the type of leadership that I’ll gladly include in my own trading portfolio.

I see two primary support levels on GIS. First, we broke out above prior highs near the 73 level. Broken price resistance becomes price support, especially when the breakout occurs on heavy volume. Even if GIS were to lose 73 support, however, I really like the stock at 71.02, which is where GIS opened after its blowout earnings. I’d be very surprised if GIS closes beneath 71 on a forward-looking basis. Therefore, a trading strategy to buy GIS at 73, then 71, would result in an average cost of 72. Any close below 71 would be my stop, so I’d be risking very little on this trade with an opportunity for much further upside.

I plan to feature one of my favorite Q2 earnings reports in my FREE EB Digest newsletter tomorrow, Monday, August 1st. If you’d like to see it, including how I’d set up a trading strategy, simply CLICK HERE and enter your name and email address. There is no credit card required and you may unsubscribe at any time.

Happy trading!

Tom

0
FacebookTwitterGoogle +Pinterest
previous post
We’re Heading For New All-Time Highs
next post
At the Edge of Chaos: Bullish Signs Emerge as Short Sellers Get Crushed and Buyers Trickle In

You may also like

Betting Against the Fed is RISKY!

February 1, 2024

The July 6-Month Calendar Range Hits August Doldrums

August 7, 2023

Is Overbought Really Bearish?

December 9, 2023

Why the S&P 500 Won’t Break 6000 (Yet)

October 25, 2024

Run Your Stock Portfolio Like a Pro Sports...

May 30, 2025

Is the Bull Market Back? Watch These Charts

June 9, 2023

Sector Spotlight: Monthly RRG Shows Preference for Stocks...

September 5, 2023

Wrong Data Gets Wrong Answers

November 27, 2023

Trend-Followers Get the Whip, while Swing Traders Catch...

November 18, 2022

GNG TV: Defense is Still on the Field

January 5, 2023

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Tech’s Next Frontier: Preparing Your Business for the Quantum Computing Revolution

      August 1, 2025
    • Sewing Bee star Lauren Guthrie threads new growth into Birmingham business

      August 1, 2025
    • Anneliese Dodds urges Labour to consider wealth tax to plug public finance gap

      August 1, 2025
    • PM urged to review North Sea oil policy after Trump calls it UK’s ‘treasure chest’

      August 1, 2025
    • Heathrow reveals £21bn third runway plan with potential completion by 2039

      August 1, 2025
    • Meta and Microsoft add $500bn in value overnight as AI boom fuels investor euphoria

      August 1, 2025

    Categories

    • Business (8,647)
    • Investing (2,165)
    • Politics (16,271)
    • Stocks (3,228)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved