Since Freeport McMoRan (FCX) was scheduled to report its quarterly earnings prior to this morning's regular session open, there's very little (OK, nothing) we can do regarding existing positions. However, for those looking to trade the stock following the earnings, I'd consider doing so against roughly $10.50. That level represents the early-March swing high, as well as the general low area from the four-day consolidation zone beginning April 13, and ending April 18. As long as the price is holding above $10.50, my inclination would be to trade from the long side.
Some of you will no doubt note the 50-day and 200-day simple moving averages (SMA) sitting near $9.45, but I simply don't want to give the stock that much room. If the stock can't continue to close above $10.50, my sense is that it will either consolidate or pull back for an extended period of time.
I received a fantastic question over the weekend regarding my use of the volume weighted average price (VWAP), and how I go about choosing my time period. The simple answer is that I prefer a single-session VWAP for intraday trading. I find a time period covering a swing low, swing high, or perhaps both is most useful when considering longer-term swing trades. When I'm attempting to fade a stock that's been particularly strong or weak since the start of the year, I also find it useful to know where the year-to-date VWAP is located.
For those planning to trade Twitter (TWTR) into the company's earnings, which will arrive after the bell on Tuesday, it's worth noting that the stock has been rotating above and beneath its 50-day SMA and year-to-date VWAP for nearly a month. Put another way, the stock continues to churn in an incredibly random manner.
After holding the stock long for roughly a week, I chose to sell it when it failed to hold its opening gains on Monday morning. In a nutshell, I was willing to hold the stock long into its earnings report, but only if I had a decent cushion to fall back on should the report disappoint. Given that the stock is neutral at best, and stocks have a tendency to gap in the direction of the higher-timeframe trend (which is either bearish or neutral depending on your timeframe), I'm going into the report flat.
Any trading or volume profile related questions can be posted in the comments section below, emailed to me at email@example.com or posted to my twitter feed @ByrneRWS.