Five Below ($FIVE) Trading Ideas for the Huge ER Gap

A quick Note for you. Specialty Retailer Five Below ( $FIVE ) reported earnings this morning.  Last Friday $FIVE was trading around $71. Yesterday it closed at $81. This morning, after earnings,  it is trading around $95 in the pre-market session.  Just a few thoughts.  Here’s what I want you to do.

Action Activities:

  • Nimble Traders that can / want to trade this today should watch the opening few 5min bars… may test higher or lower. Once you feel comfortable in a directional move, you can use either the low of the first few candles or the high as your stops.
  • Swing Traders:  Add $FIVE to your watch list. Let today’s trading range play out.  This situation could produce a “Gap n Go” where the stock never looks back OR a “Gap Fade” where traders take profits and price back fills that big gap.  The key here is to keep an open mind.  Retail is rockin now……may zoom higher, but just as easily could be too much too soon.  A third scenario is that the stock consolidates the big move by creating a flag by trading in a narrow range near the highs for a period of time.  Any way you cut it, I believe there is an opportunity here.
    • After today’s range is set we can use the range to set alarms for notification on where price is heading.

Below is a Weekly Chart on $FIVE for reference.  

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