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How to trade Earnings

Posted on 10/05/2007
Its back. The money making period is back. Regular readers by now know how earnings period provides profitable opportunities. To profit from this opportunity you need a well thought out methodology.

You can see my past posts on earnings where I have detailed most of the methods.

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


Update: As requested by many traders, I have put the previous earnings spreadsheet back.


4comments

Tom said...

With earnings this quarter expected to be slowing and tougher y-o-y comparisons, what are the prospects for earnings trades this season?

Can you point us to any good sectors?

Also, won't 2008 and Q4 guidance be more important than the Q3 results in terms of post-earnings drift given the economic climate?

Thanks!

Pradeep Bonde said...

The strategy does not predict what earnings will be . It reacts. The kind of stocks the strategy trades normally ave out sized earnings growth and gap and go on earnings.
e.g LPHI in June
CROX
CRNT
SIGM
RVBD
DRYS
FTK
EXM
OMTR
VDSI
WRLS
and I can go on and on about trades triggered by earnings release.
It is more suited to aggressive traders, who think through the strategy before earnings starts.
As to expectations of earnings slowdown, well for last 14 or more quarters that has been the prediction and every time it has proved wrong.

Jim Collins said...

OK, so on Friday AeroVironment Inc. (AVAV) announced 55.9% increase in sales and earnings up 181.6%. Would this be a stock to go long on or purchase calls on according to your system?

Pradeep Bonde said...

It was already rallying in to earning. It has to be either showing weakness or neglected with no 4% breakouts for long duration before earnings day.