Oh how I wish earnings season occurred more frequently! This morning saw several retailers with earnings; my focus was on DKS and the expected sympathy plays I projected within NKE and FL potentially as a result. DKS, to no surprise, missed and actually guided lower for backhalf, consequently giving them a nice 10% slap pre market. When results come out like this, I like to shift my focus to competitors and vendors that can be impacted by these results and/or potentially be in the same boat but have not yet reported and will undoubtedly get punished as well by the street.
I started in on NKE at 10 am with a fail on the HOD break at 10am.
FL was a bit tougher, I started in at 9:40am, a little earlier than I typically like to but because it had gapped down I thought this could be the end of the winning shorts covering and a potential new move downward. I covered most at 10 am as it started to bounce and was all out at 10:15 am, which I am glad I covered when I did as this ended up with a bounce and not really going anywhere the rest of the day.
This was probably my best play of the day and the one I am most proud of my execution despite the low volume when I started into the trade. I had started very small into this short yesterday, given the extended nature of the daily chart. My intent was to build into any move up, with a full stop over yesterday’s high. I was looking to add and reduce stop with any large move and confirmed trend direction under vwap but it didn’t happen during the morning session. I piled in pretty aggressively at 10am as it seemed to be hesitating a bit and was not getting much of a bid, so I thought this might be the moment. I ended up with an average of 49.08 on some decent size, so when that stuff back to vwap happened I took no chances on a potential rebounded as this ticker has done lately and took 2/3 off the table.