Sell the News / Key reversal day
IP gapped up on the open on a positive earnings release and then proceeded to sell off all day. This looks like a technical key reversal. Bearish engulfing pattern on bigger than normal volume which closed outside of the bull flag pattern it had been building. Short interest increased considerably as well. Daily MACD crossed over to bearish.
Earnings report was positive however with much higher EPS, EBITA margin and equity returns. Forward looking statements in the earnings calls saw some increased maintenance costs and decreased demand for hygiene products but company profits, cash flows appear positive.
XLI sold off yesterday as well showing that the whole sector was under selling pressure which likely added to the selling here.
Being that the stock had a recent run up, and it was End of month this was likely profit taking by funds holding the stock. Algos jump on downward momentum stocks as well to get some added alpha.
This looks like a short term technical reversal on a larger bullish trend. Share price should find support on one on the 3 nearby levels and the bullish trend should resume going forward.
Note as well that yesterdays action closed the gap created at the start of the bull flag pattern.
I added some OTM calls at the bottom of yesterdays candle.
Earnings report was positive however with much higher EPS, EBITA margin and equity returns. Forward looking statements in the earnings calls saw some increased maintenance costs and decreased demand for hygiene products but company profits, cash flows appear positive.
XLI sold off yesterday as well showing that the whole sector was under selling pressure which likely added to the selling here.
Being that the stock had a recent run up, and it was End of month this was likely profit taking by funds holding the stock. Algos jump on downward momentum stocks as well to get some added alpha.
This looks like a short term technical reversal on a larger bullish trend. Share price should find support on one on the 3 nearby levels and the bullish trend should resume going forward.
Note as well that yesterdays action closed the gap created at the start of the bull flag pattern.
I added some OTM calls at the bottom of yesterdays candle.
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