Rebound From Earnings Surprise

27 mar 2019

NASDAQ:AMRS came up on my stock screener as a likely candidate for a long bounce. The 14 day RSI was below 30, and the stock was currently sitting 5% above it's 20 day low. There are other ways of identifying a bounce, but this way is just as good as any other.

I started digging into why that may be and came across a sour earnings report after a positive spike in volatility from a news story from Feb 5 2019. The earnings report was a huge surprise negative (again*), and it looks like we can ride the wave of the rebound to 2.40 or 3.00, depending on your risk targets.

NASDAQ:AMRS previously was trading sideways until Novemeber of last year when a surprise negative earnings report came out. Since then, the MACD has been diverging upwards until that last earnings upset. This stock has a history of 5-10 day bull runs following a bounce. Watch for the ceiling mid to late next week.

27 mar 2019

Trade attivo

Purchased at 2.04

27 mar 2019

Trade chiuso manualmente

Sold at 2.24, probably will buy again.

27 mar 2019

Trade attivo

Got in at 2.31 and again at 2.29 and ready for that 2.40 to hit.

28 mar 2019

Trade chiuso: stop raggiunto

Got stopped out at 2.30.

28 mar 2019

Trade attivo

Got back in at 2.17

29 mar 2019

Nota

Stock up to 2.70 man it feels good to be a gangster.

29 mar 2019

Trade chiuso: obiettivo raggiunto

Sold at 2.50, a 17% profit in one day.

29 mar 2019

Nota

I am all set trading here. It was my intent to sell between 2.40 and 3.00, and I have done that.

1 apr 2019

Nota

I still think that there is a little fire left in this. We are seeing a calm before the storm right now. Two lawsuits have been announced against AMRS, and there is talk of dilution of shares from the original owners who may want to offload. I don't see it that way. 2.00 is a strong support level, and today will not be the day it breaks.

1 apr 2019

Nota

Got back in at 2.08, just couldn't resist.

2 apr 2019

Nota

2 apr 2019

Nota

About to hit 2.18 - a key resistance level.

2 apr 2019

Trade attivo

Got out at 2.10 and back in at 2.13.

2 apr 2019

Nota

Broke 2.18 resistance, yet volume is dropping.

2 apr 2019

Trade chiuso manualmente

Sold at 2.17

2 apr 2019

Nota

TRADING SUMMARY:

Bought at 2.04, sold at 2.24, +0.20 profit, +9.8% return.
Bought at 2.31, sold at 2.29, -0.02 loss, -0.87% loss.
Bought at 2.17, sold at 2.50, +0.33 profit, +15.2% return.
Bought at 2.08, sold at 2.10, +0.02 profit, +0.96% return.
Bought at 2.13, sold at 2.17, +0.04 profit, +1.99% return.

Win/Loss Ratio: 4:1
Reward/Risk Ratio: ((9.8 + 15.2 + 0.96 + 1.99)/4) / 0.87 ~= 8:1
Total Return (if reinvested): 1.098 * 0.983 * 1.152 * 1.0096 * 1.0199 ~= 1.28x
Yearly Return (if strategy repeated): 1.28*260/5 ~= 66.6x

Notes: Everything about this is unusual. 28% in 5 trading days is grossly unheard of as a consistent strategy. A Win/Loss ratio of 4:1 is usually only possible with heavy statistical analysis. A Reward/Risk ratio of 8:1 is a bit overly cautious and not wholly accurate as a stop loss since I set sell limits and watched the market instead of setting stops.