SG - Episodic Pivot - 2024-08-09

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.