During the previous earnings season, we studied the high probability of a reversal when price action is overextended before the open.
We saw this play out today with $Apple(AAPL)$ and $Palantir(PLTR)$ . Both were cratering in the premarket, down almost 5% and 8% respectively. Shorting into these conditions is extremely risky. Both tickers printed a green reversal candle and recovered most of the bearish gap today, mirroring $Amazon.com(AMZN)$ from last week, which is now delivering on the bullish expectations outlined in the Weekly Compass, this week the stock has gained +4.3%, while $Broadcom(AVGO)$ , another name flagged for a bullish reversal, is already up +2.0%.
Despite of the decline on AAPL, both the $NASDAQ 100(NDX)$ and the $S&P 500(.SPX)$ managed to finish in the green. Both indices printed indecisive inside days (harami candles) that signal a potential directional shift. Still, choppy price action persists, and the major indices need to show more conviction to confirm a durable bottom.
Semiconductors led today’s session, with the semiconductor ETF ( $VanEck Semiconductor ETF(SMH)$ ) climbing more than 2% while consumer staples, materials, energy, and financials lagged. After the bell, $Advanced Micro Devices(AMD)$ beat earnings expectations, setting up potential upside continuation across the semiconductor complex tomorrow. Even so, the broader indices still have work to do. Today, I break down the exact levels to navigate potential reversal setups in PLTR and AAPL, alongside quantitative parameters to manage post-earnings euphoria in AMD.
Markets are always moving - and sometimes, the best move is knowing what works for you.
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