RKLB Gap Down Earnings Reversal Play + Flag BreakoutTwo powerful setups are in play here, and both are primed for action:
🔹 Setup 1: Earnings Gap Down Reversal (Kicker Candle)
Post-earnings flush, buyers stepped in hard — this has been a relentless pattern in this market.
Even on earnings misses, buyers are aggressive. We saw the same setup work beautifully on NASDAQ:TEM and NYSE:HIMS recently.
This is a kicker candle setup — strong reversal signal after a gap down flush.
🔹 Setup 2: Flag Breakout at $23.50
Price is coiling into a tight flag, with a breakout level at $23.50.
Risk is defined, with stops at $22, keeping the trade tight.
🔹 My Trading Plan:
1️⃣ Initial Position: Buying May 30th $25 Calls today.
2️⃣ Risk Management: Stop at $22 for the calls and underlying stock.
3️⃣ Add Size: On a clean breakout over $23.50.
🔹 Why This Setup is Hot:
The earnings gap down reversal has been a killer setup in this market — buyers are dominating.
Dual setup means two chances to win: Reversal + Flag Breakout.
Tight risk, with a clear invalidation at $22.
⚠️ Risk Management: Tight stop at $22 — this is a LOW-risk, high-reward setup.
