RIMM is up 20% or so today morning post earning. Last night there was lot of excitement about RIMM earning. Day traders and option traders made some killings. Now even though I trade earnings based breakout, RIMM is not the kind of stock I am excited about. In fact I think those chasing RIMM here may be in for lot of pain.
On large caps earnings is anticipated. If you see RIMM price performance since August, it had already started moving in anticipation of good earnings. So is today's earning such a big surprise. Analyst are busy raising estimates and price target but I will let this pass. It is large cap and has over 186 million shares outstanding. That makes it unlikely to make a triple digit move from here in short period.
Not every earning surprise is worth playing. Only a handful of earning surprises in any quarters have legs.
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