{"id":2277,"date":"2010-08-09T01:29:52","date_gmt":"2010-08-09T05:29:52","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=2277"},"modified":"2010-08-09T01:29:52","modified_gmt":"2010-08-09T05:29:52","slug":"nflx-akam-earnings-gaps","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2010\/08\/09\/nflx-akam-earnings-gaps\/","title":{"rendered":"Netflix Recovers from Post-Earnings Losses, Akami Still Trying"},"content":{"rendered":"

This is a quick post demonstrating two stocks recovering from post-earnings losses, that is, filling post-earnings gaps down.<\/p>\n

Netflix (NFLX) surged 7% on Friday on strong buying volume, smashing through resistance at the 200-day moving average (DMA), and filling a gap created from post-earnings disappointment. Not wishing to press my luck further, I sold my calls right before trading closed. NFLX was an interesting play because it has a strong overall stock chart and the headline earnings suggested the company continues to perform just fine. Here are the factors I considered:<\/p>\n

    \n
  1. Prevailing uptrend\n
  2. Recent all-time highs\n
  3. Earnings guidance in-line, meaning selling likely due to overly aggressive expectations going into earnings\n
  4. Increased subscriber guidance – a great positive on a closely watched metric for the company\n<\/ol>\n


    \n
    \"NFLX<\/a>
    NFLX recovers post-earnings losses<\/figcaption><\/figure>
    \n<\/center>
    \nThe weekly chart shows how strong buying volume has generally dominated NFLX’s trading action – the week of the last earnings announcement is a notable exception. A short interest of 25% of float has likely helped push the stock ever upward as the company continues to perform for now.
    \n

    \n
    \"NFLX<\/a>
    NFLX has surged in 2010<\/figcaption><\/figure>
    \n<\/center><\/p>\n

    Akami (AKAM) is a stock I have followed closely ever since insiders loaded up on the stock from July 31 to August 3, 2009 for under $17\/share. This buying came directly after the market responded to earnings announced the evening of July 29 by sending the stock back to its March, 2009 lows (52-week lows were set November, 2008 below $10\/share). I was good enough to follow directly in their footsteps, but not smart enough to hold into 2010 when AKAM’s fortunes completely reversed with three-year highs and a complete recovery from post-recession selling.<\/p>\n

    On July 28, AKAM guided earnings and revenues in-line with consensus and was rewarded with a substantial loss the next day around 13%. The configuration here is almost the same as NFLX, absent the recent all-time highs. The progress toward the gap fill has also taken time before negative momentum ceased.<\/p>\n


    \n
    \"AKAM<\/a>
    AKAM attempts to recover from post-earnings losses<\/figcaption><\/figure>
    \n
    \n
    \"AKAM<\/a>
    AKAM is now trading at pre-recession levels<\/figcaption><\/figure>
    \n<\/center><\/p>\n

    As a reminder these bullish post-earnings plays accompany on-going put positions on major indices. These puts will remain in place until the S&P 500 conquers its June highs; the index churned all of last week without getting the extra push over this “last” bearish technical barrier. In the meantime, numerous individual stocks continue to recoup post-earnings losses (click here for a small sample from late July<\/a>).<\/p>\n

    Be careful out there!<\/p>\n

    Full disclosure: long AKAM calls, short AKAM put, long SSO puts, long XLI puts, long QQQQ puts<\/p>\n","protected":false},"excerpt":{"rendered":"

    This is a quick post demonstrating two stocks recovering from post-earnings losses, that is, filling post-earnings gaps down. Netflix (NFLX) surged 7% on Friday on strong buying volume, smashing through resistance at the 200-day moving average (DMA), and filling a gap created from post-earnings disappointment. Not wishing to press my luck further, I sold my … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[220,62],"tags":[407,406,404,405,1597],"class_list":["post-2277","post","type-post","status-publish","format-standard","hentry","category-earnings","category-technical-analysis","tag-akam","tag-akami","tag-netflix","tag-nflx","tag-technical-analysis"],"yoast_head":"\nNetflix Recovers from Post-Earnings Losses, Akami Still Trying - ONE-TWENTY TWO: Trading Financial Markets<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/drduru.com\/onetwentytwo\/2010\/08\/09\/nflx-akam-earnings-gaps\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Netflix Recovers from Post-Earnings Losses, Akami Still Trying - ONE-TWENTY TWO: Trading Financial Markets\" \/>\n<meta property=\"og:description\" content=\"This is a quick post demonstrating two stocks recovering from post-earnings losses, that is, filling post-earnings gaps down. 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