How to trade earnings | stockbee

7/10/2007

How to trade earnings


Welcome Trading Goddess readers. The earnings based strategy is detailed under following post.

Earnings season is one of the most interesting and profitable period to trade. Market participants discover new companies during earnings season. Many of these companies go on to make several hundred % moves in next couple of years.

During every earnings season there are handful of companies which have exceedingly good or bad earnings. Their earnings come as a surprise to market participants and this leads to immediate rally post earnings.

If you are prepared for this opportunity, you can make lot of money in short time. Plus you will get a crack at future leaders as they are just about being discovered by market. No matter the market conditions, every earnings season offers at least 20 to 25 good opportunities. Opportunities which will make 20 to 100% plus moves in few weeks.

If you go back and plot earnings date on stocks up 100% plus in last one year, you will quickly notice vast majority of them started moving from their earnings date.

Related posts :
How to trade earnings
How to trade earnings Part2
How to trade earnings Part3
Earnings and Bulkowski
Improving odds in earnings breakout
Earnings Season- Time to be very careful...
Earnings and Dan Zanger
Earning Surprise System for $1495
Trading Earnings Breakouts
Earnings Acceleration- Long Term Impact
Trading Earnings Breakout -Part1
Trading Earnings Breakouts -Part2
Trading Earnings Breakouts -Part3

6 comments:

Trading Goddess said...

Hello my friend!

Thank you for listing those posts on earnings for us! All the hard work you do over here so that others, like myself, can become more knowledgeable and profitable in the stock market is truly appreciated. :)

IIO said...

Thanks for posting your ideas for playing earnings. I also place a lot of emphasis on fundamentals. I noticed that I didn't see you mention anything about margins? Do you not find improving margins to be an important criteria?

Glenn said...

Pradeep - quick question - How do you come up with earnings estimates before the news or do you play after the release to make sure that you get the high percent earnings? I understand the utilization of IBD and the earnings after the release, I am just trying to understand if you have a method for anticipating the earnings.

Pradeep Bonde said...

iio
Margins are important but in earnings strategy I do not look at them. I look at them in IBD 70 plus EPS cases.

glenn
There is no anticipation, there is only reaction. Anyway for most earnings trade that work, no one had anticipated those kind of earnings growth, that is why those stocks go up post earnings.

Tom said...

CCF is an interesting stock today. Its making a 20% plus move. It was on IBD's earning list last night showing a 54.5% gain in EPS. I am curious, do you generally avoid AMEX stocks like this one? In CCF's case the volume is low and the bid-ask spread is wide.

Pradeep Bonde said...

I like stocks with 100% plus earnings. Those with less earnings growth also go up, but to keep the universe small i limit it to 100% plus.
Most neglected stocks are thinly traded, so I do not avoid Amex.