Byrna Technologies (NASDAQ: BYRN) became an A+ bearish post-earnings momentum setups in my database after reporting a 388.89% EPS miss, a 42.51% year-over-year revenue decline, and triggering a 27.5% collapse during the first hourly earnings candle. Although the stock initially retraced by as much as -13.25%, it ultimately produced a 14.75% maximum favorable excursion (MFE), reinforcing an important lesson about waiting for pullbacks before entering high-quality post-earnings momentum trades.
When a stock loses more than 25% in a single hour after earnings, many traders and investors immediately begin looking for a bounce. After all, surely the selling has gone too far… right?
Some of my recent research suggests otherwise.
BYRNA Technologies (NASDAQ: BYRN) delivered one of the strongest bearish post-earnings momentum setups I’ve studied so far.
The company reported a disastrous earnings miss, broke support across multiple timeframes, and continued making fresh lows throughout the following trading session.
Although my entry would have been stopped out according to my predefined risk management rules, the trade still provided an important lesson that has appeared repeatedly throughout my growing dataset:
The best post-earnings momentum trades are often entered after the first pullback, not by chasing the initial earnings candle. Below, we’ll explain why it’s often better, and safer, to wait for a retracement before trading.
BYRN Earnings Results
Byrna Technologies reported a loss of $0.44 per share on $16.39 million in revenue for the fiscal second quarter ending May 2026. Wall Street had expected a loss of just $0.10 per share on $22.91 million in revenue, while the Earnings Whisper estimate called for a loss of $0.09 per share.
Overall, BYRN missed earnings expectations by a shocking 388.89%, while quarterly revenue declined 42.51% year-over-year. That’s never a good look for a company looking to impress Wall Street analysts.
And to make matters worse, management didn’t offer much reassurance either.
CEO Conn Davis acknowledged that Byrna’s second quarter results “did not reflect the level of performance we believe Byrna can deliver,” citing continued weakness in the company’s direct-to-consumer business and slower-than-expected retail partner reorders.
Although management expects fiscal 2026 revenue to come in below approximately $118 million, institutional investors clearly viewed the report as a significant disappointment.
The market responded immediately.
Why BYRN Qualified As An A+ Short Setup
The first hourly earnings candle closed approximately 26.8% lower, immediately qualifying under my post-earnings momentum trading strategy.
More importantly, nearly every piece of evidence pointed in the same direction.
Fundamental confirmation
- Massive EPS miss
- Large revenue miss
- Weak management commentary
- Significant year-over-year revenue decline
Technical confirmation
- Hourly support breakdown
- 4-hour support breakdown
- Daily support breakdown
- Strong bearish earnings candle with virtually no upper wick
- Price closing near the lows of the earnings candle
The alignment between deteriorating fundamentals and bearish technicals is exactly what I look for when studying post-earnings momentum trades.
Whether price shows upside or downside momentum, I’ve often noticed a correlation between fundamentals and technicals leading to a higher probability of continuation.
Unlike many earnings reactions that produce mixed signals, BYRN showed almost complete agreement between the company’s financial results and the chart.
This is just one of the reasons why BYRN went on to produce a max favorable excursion (MFE) of 14.74%.
Long Vs Short Trading – Bearish Setups Often Produce Cleaner Follow-Through
One of the strongest patterns emerging from my post-earnings momentum database is that bearish setups frequently produce cleaner follow-through than bullish setups.
According to my personal research, out of 21 downside earnings momentum trades, 15 (71.4%) continued moving lower after the first hourly earnings candle, compared with 25 of 37 bullish setups (67.6%) that continued higher.
While the difference is modest, many of the downside winners—including UA, WIX, INTU, ZS, PLAB, PLAY, ACN, and BYRN—showed persistent institutional selling with relatively little buying interest once key support levels failed.
That’s why I had no interest in buying BYRN simply because it had already fallen nearly 27%.
The earnings report, management commentary, and multi-timeframe technical breakdown all suggested the market was still repricing the stock lower.
Rather than trying to catch a falling knife, my strategy is to trade with that institutional momentum when the fundamentals and technicals align, making BYRN a textbook post-earnings momentum short, not a value or mean-reversion opportunity.
Post-Earnings Momentum Trade Execution
According to my trading rules, the ideal short entry would have occurred at the close of the first hourly earnings candle.
Whether trading long or short, I always target the close of the hourly earnings candle as a potential entry price, which gives the market enough time to digest the earnings results (1-hour) , and me, the opportunity to recognize momentum and trade in its direction before the moves exhausts itself.
In this case, getting short at the close of the hourly earnings candle would have given my position an average price of $4.54.
From there, the trade became much more interesting.
Although this entry strategy performs quite well quite often, I’ve increasingly noticed that waiting for an EMA pullback often gives me a better entry price and gives my strategy a stronger edge.
So, not surprising, after getting short at that level, BYRN immediately retraced roughly 12.4%, popping to as high as $5.13 per share, and temporarily moving against the position before sellers regained control and pushed the stock steadily lower throughout the remainder of the session.
Now comes the interesting part. According to my predefined risk management rules, I would have been stopped out of this trade, despite the bearish thesis ultimately proving correct.
Entering short at $4.54, my standard 3% mental stop loss sat around $4.74, while my 10% profit target was approximately $4.09. During the retracement, BYRN rallied as high as $5.13, temporarily moving as much as 13.2% against the position BEFORE sellers regained control.
Although the original entry ultimately experienced a respectable 14.75% Maximum Favorable Excursion (MFE), it also produced a 13.24% Maximum Adverse Excursion (MAE)—far exceeding my allowable risk.
All that to say, the trade idea was correct, but the entry wasn’t.
| Trade Metric | Result |
|---|---|
| Entry Price | $4.54 |
| 3% Mental Stop Loss | ≈ $4.68 |
| 10% Profit Target | ≈ $4.09 |
| Highest Retracement | $5.13 (+13.24%) |
| Maximum Favorable Excursion (MFE) | 14.75% |
| Maximum Adverse Excursion (MAE) | 13.24% |
| Strategy Outcome | Stopped out before trend resumed |
This does indeed mean my trade would have experienced a loss, but rather than viewing this as a failed trade, I see it as an important lesson in execution quality.
The bearish thesis was correct from the start—the market simply produced a sharp countertrend rally before continuing lower.
And more importantly, as several other trade reviews and case studies in my dataset have shown, waiting for an initial pullback toward the 9 EMA often provides a considerably better entry price, reduces maximum adverse excursion, and increases the probability of a successful trade.
The Lesson: Wait For The Pullback
One pattern has continued appearing throughout my research.
Many high-quality post-earnings momentum trades experience an initial countertrend retracement before continuing in the direction established by the earnings report hitting the tape.
Had I exited according to my risk management rules around the $4.85-$5.15 area and then re-entered once the pullback stalled, the statistics would have looked dramatically different.
For example, if I’d either just waited for a pullback or exited or re-entered, that trade would have obtained a roughly 5-10% better entry price, a much smaller adverse excursion, and an even higher maximum favorable excursion (MFE) of roughly 23.5%.
Suddenly, achieving a predefined 10% profit target becomes considerably easier while simultaneously reducing downside risk.
This is one of the strongest execution lessons I’ve found so far.
Being stopped out doesn’t necessarily mean the original trade idea was wrong.
Sometimes it simply means your initial entry price wasn’t optimal.
A Pattern I’ve Seen In Other Case Studies: Retracement Trades are Often Better Trades
BYRN isn’t the first stock in my database to display this behavior.
Similar pullbacks before trend continuation appeared in several previous case studies, including:
Although each trade was unique, they shared an important characteristic of making a strong momentum move, retracing back towards their exponential moving averages, and then continuing even more in the direction of the initial move.
Those pullbacks frequently produced:
- Better average entry prices
- Smaller maximum adverse excursions
- Larger maximum favorable excursions
- Easier adherence to predefined risk management rules
As I continue expanding my dataset, the evidence supporting pullback entries continues to grow.
Key Takeaways – BYRN Case Study
In many ways, BYRN was far from a perfect trade. But it still proves to be an important trading case study.
For starters, my initial trade thesis proved correct.
Ultimately, the stock did move in the direction of the initial momentum, reinforcing the idea that post-earnings momentum often exhibits continued momentum lasting anywhere from several hours to several days.
And even though my “ideal” entry would have gotten stopped out, the lesson isn’t that my strategy failed. It’s that execution matters just as much as setup quality.
Waiting for a controlled pullback rather than chasing the close of the first hourly earnings candle could have improved the entry price substantially, reduced downside risk, and increased potential profits from approximately 14.75% to roughly 23.5%.
Combined with the broader tendency for bearish post-earnings momentum setups to produce cleaner follow-through than many comparable long setups, BYRN reinforces the thesis that momentum often lasts, and to not confuse patience with hesitation—because waiting for a high-quality pullback can improve both expectancy and risk management.
In the end, finding the right setup is only half the battle. Executing it well is what ultimately determines long-term trading performance.
If you want to go deeper:
- Explore the Trading Statistics Hub to understand how different sectors behave across market cycles
- Study real setups inside the Trade Reviews section
- Learn the framework behind high-probability setups in the Post-Earnings Momentum Strategy
This is how you turn raw market data into repeatable trading edge.
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