Thursday's after-hours session turned out to be another busy one, with earnings from LinkedIn (LNKD), FireEye (FEYE), Expedia (EXPE) and Amgen (AMGN) providing traders with plenty of action.
The session's biggest winner was EXPE, but the most noteworthy mover was unquestionably LNKD. After closing out the regular session around $227, LNKD ballooned to $260 shortly after the company's earnings were released. Unfortunately, buyers abandoned the stock in the after-hours session, and by 5:30 p.m. ET the stock was back near $211. This after-hours selling, however, brings about a potential trade during Friday's regular session.
As of Thursday's regular session close, LinkedIn's 50-day and 200-day exponential moving averages were flatlining near $220. The stock has an uptrend line spanning from mid-May to the present day near $211. And lastly, the stock's higher time-frame swing low currently sits around $203 (from late June). Given the decline from $260 to $211 during Thursday's after-hours session, it's fair to assume investors saw something they didn't like with the earnings release. But as long as the stock doesn't plummet through that $203 swing low, I would not rule out buyers stepping back into the name at Friday's open.
In a nutshell, we have the above three reference points to trade against. Assuming the stock stays weak and opens Friday's session around $211, day time-frame traders may want to give the stock five or 10 minutes to trade at the open, and then look for buyable momentum above the first intraday high with a stop back under the session's low. This obviously isn't a sound plan for the more conservative traders in the audience. But aggressive players with a very short time frame may want to watch the stock and modify this idea to fit their own unique approach. And just so there's no confusion, a close under $203 would absolutely amount to a nasty higher time-frame break.
As far as Friday E-Mini S&P 500 futures (Es) auction is concerned, we'll once again be focused on clearing two-day highs around 2104, and working through Thursday's weak high. Given the lack of excess during Thursday's regular session, my baseline expectation is for a test above recent highs, perhaps toward 2106 to 2106.50. For reference purposes, 2106.25 represents the fairest price to conduct business over a two-day time frame from July 21 and 22.
If the current advance is going to stall and retrace toward the mid-2080s, I would not expect to see bullish value migration beyond that 2106.50 figure. However, should value continue to shift beyond 2106.50, we'd likely see continued bullish action toward 2112 to 2113.50, and eventually on toward 2122.50.
In the event a push above recent 2104 highs is rejected from 2106 to 2106.50, I'd expect a pretty quick slide toward 2096. Any continued selling would once again be expect to attract buyers toward 2085/2086.
Any trading or volume profile related questions can be posted in the comments section below, emailed to me at parkcityyeti@gmail.com or posted to my Twitter feed @ByrneRWS
