Chart of the Day - Thursday, July 30th, 2020

Today’s Chart of the Day was shared on Twitter by Brian Shannon (@alphatrends). With the height of earnings season upon us, Brian reminds us that trying to catch a falling knife often ends badly. Intel ($INTC) gapped lower by more than 13% at the open last Friday, after the company reported earnings the night before. It's down another 6% so far this week. As Brian points out, the last two times Intel gapped lower after earnings like this, price went on to make another double-digit (%) leg lower over the following weeks. It's easy for a novice trader to be tempted to "buy the dip" after an earnings gap like this. After all, you're supposed to buy low and sell high, right? Well, as we know, markets tend to trend. What looks low often goes lower, and what looks high often goes higher.