Stocks on the move
The market has digested the correction. The Fed interest rate decision is out of the way. Inflation worries have been doused a bit by Fed aggressively talking the market down. So what will lead the market to higher level. The commodities are back with a bang and number of stocks in the sector have done well or looking poised to move higher. So inflation worries will be back soon ?
The most important event is next. This week will mark the start of the earnings season. How the market reacts to earnings will be interesting to see. With many stocks having corrected sharply, any earnings surprises would lead to some good moves. If the earnings disappoint we will have a cascade down.
As regular readers know, earning season is my favorite season to trade. I am always on the look out for Earnings Rockets. Every earning season I am on the look out for little unknown companies, that suddenly have a surge in earning. They just takeoff making 100% plus move sometime by the next earning season.
Last earning season one of my best trade and which contributed to more than 80% of my profit for this quarter was HSR- Hi-shear Technology Corp.
HSR, Hi-Shear Technology Corp.
According to Google Finance :
Hi-Shear Technology Corp. designs and manufactures pyrotechnic, mechanical and electronic products for the aerospace industry, national defense and other applications where pyrotechnic power is desirable. The Company's products consist primarily of pyrotechnic power cartridges and various types of aerospace separation devices. Hi-Shear cartridges, cutters, pin pullers, separation nuts and separation bolts are used in the functioning of satellites and the vehicles, which launch them into space. The Company also designs and manufactures electronic firing systems that control and sequentially fire the pyrotechnic devices according to pre-programmed parameters. These electronic devices and pyrotechnic products are used in missiles, launch vehicles, fighter aircraft ejection seats and other applications.
Here is how this stock was trading before earnings.
It had triple digit earnings growth for the quarter. It gapped up on earning and that's when I got in to it. Subsequently added to position on corrections and pullback.
In 60 days since earnings the stock is up 223%. Last week once it crossed 15 it made it to the IBD 100 at 54 number. Predictably it had a nice bump post IBD 100 addition.
HSR was not the only earnings play which
made this kind of move. BDCO made a 400% plus move in less than 15 days post earning before reversing.
In any earning season you will find a handful of stocks like HSR and BDCO which reacts immediately to earnings. Some react late offering continuous opportunities for entering them later. Some react negatively and you can find good short entries. Some of these stocks go on to be like HANS, NTRI, JOYG, TIE, etc. making multiple moves post earnings. But at the beginning of most 300% plus move is unknown company with significant earning surprise.
Here are some more stocks from my database setting up for a possible move.
SMDI, Sirenza Microdevices
SIMC, Simclar Inc
BIDU, Baidu.com Inc
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