The Earnings Reversal Strategy Every Trader Should Know 📆

Why It Matters

Because earnings‑driven volatility is a predictable source of short‑term price dislocation, a VWAP‑based reversal system lets traders lock in gains while the broader market may be falling, enhancing risk‑adjusted returns.

Key Takeaways

• Use VWAP breakouts to trade earnings reversals on gap‑down stocks.
• Buy when price breaks low then retests above VWAP within minutes.
• Tighten stops at candle low and prior low for risk control.
• Multi‑day VWAP serves as ultimate profit target for larger moves.
• Strategy remains profitable even during broad market sell‑offs.

Summary

The video walks viewers through a repeatable earnings‑reversal trading method that hinges on VWAP and multi‑time‑frame VWAP analysis. Kenny Glick demonstrates how to capture short‑term price rebounds after a gap‑down earnings move, even when the broader market is declining.

The core signal is a fake‑out shake‑out breakout: a stock gaps down, hits a new intraday low, then quickly recovers above the day’s VWAP. Glick enters around the 9:32 am mark at $111.20, sets tight stops at the candle low ($110.15) and the prior low, and scales out at incremental targets ($112.50, $115). He also references the multi‑day VWAP as a longer‑term exit, noting the price came within $0.35 of that level.

Glick labels the pattern a “Kardashian bottom,” emphasizing its reliability during market stress. He points out that the trade stayed green despite a market hammer, earning a dollar per share on a quick flip and avoiding a flat stop on the remaining position.

For traders, the approach offers a disciplined framework to profit from earnings‑driven volatility without chasing the broader market. By anchoring entries and exits to VWAP levels, the strategy provides clear risk parameters and scalable profit targets, making it adaptable across different stocks and market conditions.

Original Description

"The market is crumbling around me, and I'm staying green by trading the earnings reversal pattern." 🗓️🔋

When a high-profile stock gaps down heavily on an earnings report, amateur retail investors panic or try to blindly buy the falling knife. The professional day traders do something completely different: they wait for the institutional algorithms to trap the bears.

In this quick clip, veteran executioner Kenny Glick details his signature "Fake Out, Shake Out, Break Out" strategy on Lululemon (LULU).

The Strategy Mechanics:

The Shake Out: At the market open, the stock slides to create a sudden, fresh morning low, clearing out weak long positions.

The Break Out Trigger: Kenny waits for the stock to quickly reverse and break back above the Intraday VWAP (the blue line). By entering the long position right at the VWAP cross, his maximum risk is strictly defined by the bottom of that exact execution candle.

The Structural Target: He uses the multi-day Anchored VWAP (the orange line) as his macro target, systematically taking profits on the way up at key round numbers.

Even when the position faces secondary chop or a broader index sell-off, using strict volume-weighted boundaries ensures you capture points on the upside and lock in flat stops on the rest of your lot.

📊 Want to anchor custom VWAP metrics for your earnings trade? Build your own day trading layouts for free on Barchart: https://www.barchart.com/education/technical-indicators

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