Earnings and Bulkowski

One of the patterns highlighted in latest edition of Encyclopedia of Chart Patterns by Thomas N. Bulkowski is earnings lead breakout. Sometime back Bulkowski also wrote a article about it in Active Trader magazine.

Bulkowski's Earnings Flag

Performs best in an upward price trend.When the company announces earnings, the stock makes a large move up or price gaps upward the next day if the market happened to be closed.Look for a near vertical price run, preferably lasting several days.Near the top of the flagpole, price consolidates and usually trends downward. The appearance can be a flag, pennant, or an oddball shape. The best performers are tight congestion patterns, not loose price structures with the stock meandering up and down.A breakout occurs when price pierces a flag or pennant trend line or closes above the high in the pattern (including the flagpole). Don’t trade unless you get an upward breakout.

His method is different from what I have outlined. It basically involves buying a bull flag post earnings. According to his article and book it is the best performing event pattern with average 34% returns. Now if you see the examples he talks about most of them involve buying days after earnings. While the objective of tracking the 100% plus earners on day of the earnings is to catch the first part of the move, which is very rapid up move.

Many times the stock will form bull flag so late in the move that you would miss bulk of the possible returns by waiting for the bull flag. I have traded this for 25 or more earning season and in my experience the real good surprises (significant earning surprise or growth, low float and with no major price growth in last 65 days) are best bought on the earnings day. Buying after the bull flag is formed is another way to play the earnings. Now this should excite the technical analysis junkies even more about trading earnings breakout.

Related posts :
How to trade earnings
How to trade earnings Part2
How to trade earnings Part3

Related posts from last earnings season:
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

Best site to learn to trade

If you are serious about your trading and want to build an enduring edge, the Stockbee Member site might help you.

Members tell me they have tried a lot of things before coming to my site, and it has offered them the most extensive and detailed methods to swing and position trade. Members range from very experienced traders to novices.

No advertising, no hard marketing, no promotions, no free offers, no affiliate marketing, no incentive to other bloggers to promote the site, no constant tweets self-promoting the site, and no tall claims. Every member comes through word-of-mouth recommendations from existing members.

As a member, you will learn the basics of swing trading, momentum investing, growth investing, and risk management. You will learn about Stockbee Momentum Burst breakouts, Stockbee Trend Intensity Breakouts, Stockbee Episodic Pivots Breakouts, Stockbee Lemonade Strategy for 401k, and many other member-shared methods.

You will learn how to set up your own scans, how to select the right kind of stocks, how to set up stops, when to enter, when to exit, how much to risk, how to track your trades, and all other details about trading.

You will learn about developing your own methods and not relying on others for trade ideas. Develop your own edge. Once you develop your own method, you will have a lifelong profitable method.

The site gives you an opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different backgrounds and experiences willing to help each other. Members have shared their methods, scans, software, backtests, and market insights.

Every day, the emphasis is on continuous learning and upgrading of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors, and new traders.

You will see that many trading bloggers have been using my market timing methods, scans, and chart templates. They have developed their own methods based on my methods.

Almost every member comes through a recommendation of some of the leading trading bloggers and trading sites. 80% or more members continue to be members for more than 3 years. Most tell me that they stay on because every day they learn so much from the members' site.

If you are looking to develop your own trading strategy, the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on the members' site. Every method, every scan, every nuance is detailed, and all possible help is offered to design your own method.

404

Recent Articles