Sweetgreen Earnings Gap Trade:
- Earnings Report: August 8, 2024 (After Market Close)
- Results: Beat on revenue but missed significantly on earnings
- Gap Up: 29% on the following trading day
- Challenge: Entering via 1-minute or 5-minute ORH with LoD as stop led to early shakeout
- Key Observation: Low volume in the first minute suggested switching to a 5-minute bar chart for better entry confirmation
Adapting to low initial volume by using a 5-minute bar chart helped avoid early stop-outs and improved trade execution.
Also some Red Flags to Notice:
- 1. First 5-Minute Bar Exceeded ADR: - High volatility suggests heavy selling pressure.
- 2. Breakout Failed to Hold: - The initial breakout quickly faded. - Switching to a 1-minute chart reveals that after the first breakout bar, the stock never recovered.
These signs indicate weakness in the move, making it a risky breakout to trade.
