Game changing catalyst offer explosive opportunity
Look for a game changing earnings surprise announced after hours or before market open. For this look at pre market gainers and last night after close gainers.
You want to see stock with neglect, that has significant first or second earnings surprise. If such surprise happens right at the beginning of a new rally then the move can last for weeks or months and the magnitude of move can be 50% to at times 1000% plus.
Big game changing catalyst kind of moves are Episodic Pivots that change the existing Wall Street perception about a company’s business and as a consequence its future price potential.
Earnings related Episodic Pivots are the most common and happen frequently. But they are not the only EP , biotech sector has its own kind of EP. Biotech move based on drug trial data. A loss making biotech can go up a lot on “potential” of drug approval which might or might not happen after many years.
Loss making technology companies also can at times go up based on future potential or sector moves. This tends to happen in later stages of bull moves.
From a practical process point of view focusing bulk of effort on earnings EP is good strategy as they are easier to understand.
In a day you do not get many stocks with huge volume surge and also up big. The few that do are worth examining in detail and if they have several months of neglect they offer best opportunities.
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