SWHC: A lesson about earnings

SWHC (gun maker) reported earnings last night; a member asked me yesterday if I saw anything on the chart that suggested a leak, now remember divergences can suggest a leak, but it is how the stock will react, not what the earnings will be as they can often be two very different things as you may have sen in the past.

I saw no divergences standing out suggesting a leak. SWHC announced record results with a 48% increase in gun sales, they blew it away. In after hours here's what SWHC looked like...

 From yesterday's close, after earnings were announced, SWHC went up about +6% in AH trade, however this can always be deceiving and I usually like to use any really big moves on earning in AH to book profits. Look at what happened on the open this morning...

SWHC gapped up and quickly fell to a 2.2% loss. Now I am not predicting how the rest of the day will go, just that earnings are often deceptive and if the consensus on the street is this was the best quarter SWHC will have, then it's all downhill from here and time to sell, it's not what they did, it's what the Street thinks they will do next quarter.

In any case, an interesting one to watch.