Double Trouble update
As of 11 A.M there are 4 stocks showing up on scan. Now I took one trade out of this early morning when it appeared on 2% scan, XING. The stop is 16.52, which is the low from two days ago. It was also showing on Episodic Pivot scan, so I chose it instead of choosing one from IBD 200 list. It also had few weeks of weakness.
Out of the 4, 2 were existing positions as both had Episodic Pivots few days ago.At the same time I closed my FRPT positions of few weeks ago as it gapped up, I moved my stops to lock in profit and got stopped out.Also FRPT was showing churn on high volume from yesterday, so I was anyway going to close it. So I put that money to use and bought XING.Now this is not a full position as I am holding cash reserve for earnings trade.
So even though there are number of breakouts from the list in reality unless there is cash in account, I will not buy a fresh position. So rest of the time it is just doing nothing. Actual trading in a week is at best 40-60 minutes of work all put together. Most of it is mundane thing like running scan and adjusting stop or opening and closing stops.Sometime there are weeks with no new trades. That is the time I spend writing posts on blog or answering emails or R&D new things.
ACAD,Acadia Pharmaceuticals (Google Yahoo Earnings Chart)
DGIT,Dg Fastchannel Inc (Google Yahoo Earnings Chart)
SMSI,Smith Micro Software Inc (Google Yahoo Earnings Chart)
XING,Qiao Xing Univ Telephone (Google Yahoo Earnings Chart)
From the earnings track, INSW which had earnings last night fired and is up 71%.
Out of the 4, 2 were existing positions as both had Episodic Pivots few days ago.At the same time I closed my FRPT positions of few weeks ago as it gapped up, I moved my stops to lock in profit and got stopped out.Also FRPT was showing churn on high volume from yesterday, so I was anyway going to close it. So I put that money to use and bought XING.Now this is not a full position as I am holding cash reserve for earnings trade.
So even though there are number of breakouts from the list in reality unless there is cash in account, I will not buy a fresh position. So rest of the time it is just doing nothing. Actual trading in a week is at best 40-60 minutes of work all put together. Most of it is mundane thing like running scan and adjusting stop or opening and closing stops.Sometime there are weeks with no new trades. That is the time I spend writing posts on blog or answering emails or R&D new things.
ACAD,Acadia Pharmaceuticals (Google Yahoo Earnings Chart)
DGIT,Dg Fastchannel Inc (Google Yahoo Earnings Chart)
SMSI,Smith Micro Software Inc (Google Yahoo Earnings Chart)
XING,Qiao Xing Univ Telephone (Google Yahoo Earnings Chart)
From the earnings track, INSW which had earnings last night fired and is up 71%.
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16 comments:
Pradeep,
Do you usally buy large breakouts such as INSW right at market open or wait till 10/11 am in morning after the picture gets clearer?
I as looking for 20% and bought market open, got out after 20%. INSW was not the best of candidate for earnings as sales were not very hot, but I knew it would give 20% so I made my intended target with small trade.
The one which I like the best have something like 400 to 700% plus earning growth plus 50 % plus sales growth.
I lock in my profits on earnings trade at 20%.
Thanks Pradeep,
Because you were expecting the profit percentage, Do you know what makes two stocks having 100% plus earning growth breakout?
I am trying to figure out what was different between insw and chke? Why chke did not breakout?
Awesome blog. Very educational.
I am new to this blog. Could you please explain what is Double Trouble. I was looking at key posts and could not find an explanation. Thanks.
INSW might see 6.50ish, small float.
Double Trouble
When a stock doubles, it has high probability to double or to get in to trouble. So those breakout after 100% plus move go on to make bigger moves.
Nilay
CHKE had lots of one time gains in that earnings, plus it was morning announcement. Morning announcement reaction is same day, after close like INSW react next day, giving time to plan the trade.
Pradeep,
Thanks for introducing to the earnings strategy ! I got in INSW pre market with a very small position and got out at 6.50.
Amit
INSW action sums up how the earnings trade works. Stock had low float, prior to earnings was neglected, had no major rally going in to earnings. Earnings bought in buyers and the momentum feeds on itself.
There will be at least 40 to 50 such stock in earning season, out of that 20 to 25 are relatively easy to get in to. If you put in more efforts you will find around 70 to 100, 20% plus moves during earning season. The 20% move will happen in compressed time frame of 1 day to few weeks. Not all the moves are capturable, but if you can catch 20, that can make a year. Earning season happens every 3 month so opportunities repeat.
Regarding INSW,also a couple of other things of note that I use as "trading
weapons" as to why I was on INSW right from the get go:
Recent zero volume stocks
Up big,54%, the night before on the Afterhours leader board BUT a very late entry with only minutes to open on the premarket leader board that I use.
This concept is explained here:
Afterhours
INSW had both "angles" going for it.
And congrats to all those that caught it!
where can u find when earnings are reported?
Kevin,
Try this link
http://biz.yahoo.com/research/earncal/20070418.html
Muddy
Good point.
All the stocks which people rave about today like NTRI, HANS, GROW, had exactly same pattern before they were discovered during earnings season.
Kevin and S
Yes some of the stocks will be in that Yahoo list, but most of the big movers like INSW kinds are so unknown that I have often seen them not figuring on any earnings calendar before the earning release.
"not figuring on any earnings calendar" Especially if they are underfollowed and under-owned by institutions. Several of the small caps I'm trying to watch pre-earnings, I have no idea WHEN earnings will be!
How do you find the earnings of companies that are not widely followed? For example, I went back to look at INSW earnings release but could not find it. How do you know when earnings are released and that they are exceptional? Sorry for this newbie question, but I really appreciate the help.
mauidiver15
Pradeep suggests using IBD (print or online version). INSW earnings were announced after market close 4/16/07 and appeared in the IBD 4/17/07 edition. The online version is available the night before which allows you more time to select earnings candidates.
Earnings announcements are documented on Wall Stree J, online version. Earnings in Market Data Center is a free service.
http://online.wsj.com/mdc/public/page/2_3024-digest_earnings.html
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