HPQ: Playing the Price Action from Earnings with Intraday Fibs Aug 25, 2016 HP Inc (HPQ) reported earnings after hours on Wednesday August 24 and offered weakness in printer sales as a reason for a lower outlook into the rest of the year. This news sent shares of HPQ dropping well into the after-hours market and into today’s pre-market where we selected the high volume stock as a potential day trading idea for playing into the stock market open. High volume and excellent price action are a great combination for creating a low risk to reward super active trading opportunity that could lend further into the trading session if the stock can recover from the GAP DOWN. Stocks that have a high average trading volume also have lower spreads generally at market open and this is a great asset to a day trader. HPQ averages over 12 million shares a day easily. HPQ: Previous day close on Aug 24 $14.40 Current day open on Aug 25 $13.63 Net drop at open Aug 25: $-0.77 Here is a screen capture of the Opening 45 minutes of today’s trading action. I started building Fibonacci retracement and extension projections right after the 1st swing high using a 1 minute time frame. (Screen Capture at Open) The strategy we used at open is called Fill the Gap. We look for a stock that have been battered pretty well in the premarket and wait for the short traders to cover their trades. This usually happens in the first 5 to 15 minutes of trading. If the buyers step in, we enter the trade at the B boundary of our Fib wave and target the move off of the retracement depth. HPQ was providing shallow retracements and went into a really great series of extensions from the Opening Bell. Even more impressive is the follow through as it follows our Fib projected path all the way. This is a great example of how to play the Opening Bell using Price Action and Fibonacci’s! (Screen Capture at 1:25 EST) In fact, HPQ “filled the entire gap” by trading to and above the previous day’s close as I write this article and there are still over 2 hours left in today’ session. Quality strategies partnered with the patience to stay with your trading plan spell success in any market. I hope you were able to book some on HPQ last week! Happy Trading! Kevin
