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Episodic Pivots

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Earnings and earnings surprises lead to some Episodic Pivots. What determines the probability of stocks making an up more or down move such Episodic Pivots is a function of prior price action coming in to earnings, earnings acceleration or earnings surprise, forward guidance, valuation, fund holdings, and so on.

More important than that is where is the earnings in reference to the stocks earnings cycle. Is this a first major earnings acceleration/ surprise after many quarters of below par growth or is this a 8th or 12 th earnings acceleration. The second important consideration is where is the stock in its price appreciation cycle. Earnings acceleration/surprises early in a stocks price life cycle are good from trading perspective. It gets you in to a trade early in a long duration rally.

Earnings acceleration/surprise late in the cycle are slightly tricky to trade as they have both possibilities. It can lead to blowout runaway move or it can lead to reversal after one day gap up. Technicians call them island reversals.


ENR,Energizer Holdings (Google  Yahoo  Earnings  Chart
ESRX,Express Scripts Inc (Google  Yahoo  Earnings  Chart
HTI,Halozyme Therapeutics Inc (Google  Yahoo  Earnings  Chart
LBY,Libbey Inc (Google  Yahoo  Earnings  Chart
MHS,Medco Health Solutions (Google  Yahoo  Earnings  Chart
PCAR,Paccar Inc (Google  Yahoo  Earnings  Chart
RE,Everest Re Group Ltd. (Google  Yahoo  Earnings  Chart
RGR,Sturm Ruger & Co Inc (Google  Yahoo  Earnings  Chart
SNA,Snap-On Inc (Google  Yahoo  Earnings  Chart
TO,Tech-Ops Sevcon Inc (Google  Yahoo  Earnings  Chart
TRCR,Transcend Services Inc (Google  Yahoo  Earnings  Chart
TRT,Trio-Tech Internat (Google  Yahoo  Earnings  Chart
WGOV,Woodward Governor Co (Google  Yahoo  Earnings  Chart
WHR,Whirlpool Corp (Google  Yahoo  Earnings  Chart
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1 comment:

mrstrader said...

MBLX from the "pivots" a few days ago sure is working, of course herb Green berg pushed it on CNBC today so that is a negative. Took the chance and bought on Monday on the news. Good example of your (and my theory)