Season of opportunity is approaching

Earnings season is one of the most interesting and profitable period to trade. Market participants discover new companies during earnings season. Many of these companies go on to make several hundred % moves in next couple of years.

During every earnings season there are handful of companies which have exceedingly good or bad earnings. Their earnings come as a surprise to market participants and this leads to immediate rally post earnings.

If you are prepared for this opportunity, you can make lot of money in short time. Plus you will get a crack at future leaders as they are just about being discovered by market. No matter the market conditions, every earnings season offers at least 20 to 25 good opportunities. Opportunities which will make 20 to 100% plus moves in few weeks.

If you go back and plot earnings date on stocks up 100% plus in last one year, you will quickly notice vast majority of them started moving from their earnings date.

Related posts :
How to trade earnings
How to trade earnings Part2
How to trade earnings Part3
Earnings and Bulkowski
Improving odds in earnings breakout
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


Unknown said...

It looks like the indexes overall are in a buy zone and will be especially ripe for buying for an intermediate term play within the next few days (if you are not already scaling in long on today's dip to new lows). New highs on the indexes are on the horizon in July.

Unknown said...

Lots of calls bought this afternoon. It is likely we will see another pullback very soon for more longer term buying opportunities.

Pradeep Bonde said...

I see lots of short covering and some pockets of strength like KMGB, WFR, ARGN, SYX, FUL, CLB, etc.

Unknown said...

Hi Pradeep, those earnings posts are great! I am learning a lot. Thanks!

Do you agree PENX today would be almost a perfect candidate for the earnings play? %149 EPS, %20 revenue. The stock was in consolidation for last 3+ months, had some major movements late January to March, but not true breakouts. Very little known, only one analyst (Roth Capital) following it. It gapped up 18% and ended up $31% with 7000% of average volume.

However, I found it with the WSJ digest, since PENX didn't show up on any earnings calendar, WSJ, Zacks, Yahoo, marketwatch or briefing.com. It looked like the earnings came out of nowhere before the market was open this morning. My question is: do you have any other sources that listed this earnings release? IBD or other subscription-based. Like you said, those free sites tend to update data slowly. I am looking for more reliable and more comprehensive earnings coverage. I also understand we probably miss this sort of things all the time.

What's your thought or rule on chasing missed ones like PENX? If it pulls back to the gap, making a rounded bottom, or making a high level flag, would you enter it?

Do you consider any surprise factor? meaning how much the earnings beat the estimates. The article "Jump Start" basically stressed this, "well above Street estimates". It seems you think the absolute %100 EPS and %5 revenue growth (or other cutoff rates) is what really matters.

What's your take on RIMM's earnings report today? 73% EPS and %76 revenue. It did beat estimates, but not with a wide margin, however the forcasts are good. While RIMM is well known, it's proven itself as a big mover. Would you trade such one as earnings play?

Thanks a lot!

Pradeep Bonde said...

Yes PENX was ideal earnings candidate.It will go up even more from here. Most good earnings play do not give you a chance to enter on pullback.
PENX earnings was on Marketwatch. It was announced pre market around 6 a.m.
Bloomberg has most reliable earnings coverage.
The earnings play which really work seldom have any analyst on them, so there is no consensus to compare with. PENX has one analyst covering it.

RIMM does not meet my criteria of earnings play at this level. It had a run up in anticipation. Its earnings was widely anticipated.

Anonymous said...

imo PENX was about as good as it gets with an "undiscovered",low outstanding shares earnings play.

I saw the news broke at 6:02 a.m
Watching it in premarket I saw the last sale a tad under 23.

Pradeep is very correct when he says "Most good earnings play do not give you a chance to enter on pullback".

Numerius said...

I bought PENX this morning at $25. Definately the standout from yesterdays market.

Anonymous said...

I always watch the late premarket hits,not only for Earnings but for any other news that may turn a stock into a Breakout,what may turn into an episodic pivot maybe you could say.

Today I called this in my chat:
(Jun 29-10:01) Muddy: LOCM late pre,lower vol 4.6

Since this a pretty unfollowed stock I loved it,especially since I remembered the unreal move it made 1/26.

Since I daytrade mostly I stopped out at 6.48 for a 40% quickly.

Pradeep Bonde said...

You are right. News and catalyst plays are good things for both short term and long term trading. But it is a bit of art. Some people have the knack of picking exactly the wrong ones.

Editor said...

Heres my post that talks a little about what I like about PENX

Numerius said...

we got a runner here with PENX. Is trading supposed to this easy?

Unknown said...

Hi muddy, thanks for your answers. How do you monitor the news breakout? My problem was that I was only monitoring the stocks on earnings calendar from marketwatch.com, and it didn't list PENX at all. When I saw the news in the afternoon it was already too late. What's the best way to see the news when it broke out in the morning? I will switch the earnings calendar to bloomberg's, it seems they had PENX on, Pradeep said it was the most reliable too.

Also, how did you find LOCM, and how do you watch for premarket late hits? Thank you very much!

Anonymous said...

Mike Summers,
Nice post on PENX.
Excellent blog,glad to find it.

Hi gnib,
I just follow the leaders on the Premarket board on http://dynamic.nasdaq.com/dynamic/premarketma.stm
and click on their news.It not only gives me the earnings ones but the other stuff like the LOCM kind.
To find the LOCM PENX kind that hit the leader board late I just keep refreshing every few minutes from 8:30 to right after the close.There are usually 1 or 2 late hits on the lower float and/or undiscovered type every day.BBOX was one on Friday and it ran pretty well after the open.It is one I will definitely keep on watch.
Bloombergs from what I've heard is very reliable as you say.Since I usually have a bunch of "live" watches everyday I myself only use nasdaq.com as my source as I try to keep it simple and not clutter my brain with too much.
I daytrade right off the scrolling HOD list from my broker so whenever a stock that I consider "LIVE" for that day hits it I check for volume spikes and/or bid/ask flips.
If the stock is at or just crossed an even dollar mark I consider it even all the better.
Like Pradeep says there are so many ways to make money in the markets,another besides the late pre hits that has worked for me are recent IPOs that just literally take off out of nowhere like INFN did Thurs and LLNW did Friday for great daytrades.
The catch is that you need to be watching a HOD type list to catch it near its break as they tend to fly.Look at a 1 min chart for these 2 the days they ran and you'll see what I mean.
I spotted both as soon as they broke out.
From Fridays chat:
(Jun 29-13:53) Muddy: Loki LLNW 16
(Jun 29-13:53) Muddy: the ipo
(Jun 29-13:54) Muddy: gonna go looks
(Jun 29-13:55) Muddy: LLNW yeah,just like INFN yest,love these
(Jun 29-13:55) Muddy: ipo poppers
(Jun 29-13:56) loki3361: 17
(Jun 29-13:56) Muddy: I caught it at 16.2

Lest you think I only daytrade for short term gains I very much follow the Pradeep kind as I take my DT profits every 6-8 weeks and roll them into these kind for long term holds as I trade off the same basic daytrade amount month after month.
On my blog you will see I opened 5 trades on 6/18,.... KMGB LPHI FCSX CAVM ZOLT
From the list of 20 I had for that week I'm still watching NGA and SYNL for a break to add these along with more LPHI if it begins to rise back up towards its 52 week highs

mrstrader said...

Muddy, what is the internet address of your blog? While I of course think Pradeep is wonderful and darn near irreplaceable, it never hurts to get additional input. Also, what broker do you use to get the streaming HOD'S? Thanks.

Nashasa said...


Muddy's blog is at: http://greenonthescreen.blogspot.com/

His chat is at: http://mysite.verizon.net/vzeu44ws/greenonthescreen/

mrstrader said...


Pradeep Bonde said...

nice summary of your method.
I also use similar approach. I will have more on how I do it in separate post.
The trick is always to be able to quickly interpret a catalyst or news. The question I always ask first when I see a news or earnings is how much will this stock move doe to this. If I feel it will result in 20 % plus move, I enter in a flash.
I also caught that LLNW move. IPO's are very good for playing breakouts, they tend to always overshoot in my experience, giving you very profitable trades.

Anonymous said...


I use Scottrade.

On my blog if you do a search of "market movers" you will see a screenshot of the HOD list.

One feature not included about this list not mentioned in that post is that the stock symbol is now highlighted in blue if it is on the watchlist you have up at the time,which cathes your eye for a quick alert.

Couple other things,if you click on
"chat room" link on the the right then click on a day you can see how some of these stocks can be caught pretty quick on a break.
Also if you click on the link "my trades" I have 15 days of actual day trades I made off this HOD list.

Thanks for posting the blog and chat address,you got here before I did.

Asaf said...

So, sorry for being sooo slow, but I went to both bloomberg and marketwatch and couldn't find the desired news calendar. I was looking for a calendar with exact hours of earning reports for everything. I was looking to know, for example, what's going on the day after tomorrow, and on what times... Is that even available or did you guys mean a different kind of calendar for earning reports?

Pradeep Bonde said...

That kind of info is not published anywhere. Unloved, unknown stocks earnings, no ne tracks. You have to get that information from news releases.