How to find big moves for the day or months | stockbee

8/21/2013

How to find big moves for the day or months


NFLX was up 13 dollar yesterday. What triggered this move? A news of new contract. Like this you will see many big moves in a day. Many of them have common character. They have fresh news.

Fresh news creates fresh moves. 

Fresh news can be good source of candidates for swing traders. If you set up a systematic process to go through news for 30 to 60 minutes in the morning, you can find 3 to 5 good candidates for swing trades.

Stocks that release news pre market can often make one day big moves. Many of them start with gap up open. Some of them are up in post market or pre market session.

Stocks release news post and pre market. Analyst upgrades tend to happen in the morning. In earnings season lot of news is released post and pre market. Such news often leads to one day move on day of news. These one day moves can be 5 to 20% magnitude.

Sometime if the news is significant it can lead to multi week or multi month rally. For day traders and short term swing traders news catalyst can offer a range of opportunities.

Such stocks with fresh news are called stocks in play or story stocks. 

News that can affect price:

  1. Earnings
  2. upgrades/downgrades
  3. govt policy change
  4. FDA decision
  5. Natural disaster
  6. Political instability
  7. Insider buys
  8. CEO/CFO change
  9. New product launch
  10. New order

There are many free sources of news. If you want to catch intra day moves you need to build process loop for tracking news on daily basis post and pre market. Many Stockbee members exclusively focus on this for swing trading or day trading. Day traders tend to track news more actively

When you start tracking news to find swing trades , at first you will feel every news is important. But soon you will figure out what is consequential news and what should be ignored. This kind of skill building requires months of regular practice. After market close you have to study what news triggered big moves and why. Cumulatively if you build this knowledge over 6 month to a year, then you can just glance through news to find the real moving news and you will become more efficient in spotting game changing news.

There are several sources of news. Some like briefings.com are paid and some are free. Some paid sources like Bloomberg are ultra fast.

Many of these kinds of news catalyst lead to just few hours rally , some lead to longer term trends lasting months or weeks. Those stocks tend to be neglected and then have significant catalyst. Those are the kind of game changing catalyst we want to focus for long term trades.

Look at FB. Some weeks ago it had big news about earnings. The news was big surprise for market. The news lead to start of a next up leg. This up leg might last at least till next earnings season. 

Look for game changing news if you are looking for longer term moves or position trades. Small news leads to small moves, big news leads to big explosive moves.

If you are a swing or day traders remember this important thing:

Fresh news creates fresh moves. 





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