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Everyday hunt for stocks with big ctalyst

Posted on 9/02/2014
Look for stocks with big catalyst everyday. You may not find them everyday, but once in a while they show up and just few of these big trades can make your year or sometime can change your life.

In order to find big winners you need a daily process that you follow to find them. If you follow the process day in and day out , luck will favor you and you will not miss a big opportunity. 

Many big earnings are a result of surprisingly good earnings. The Stockbee Episodic Pivots (EP) method focuses on finding the big winners.

EP is a very specific pattern post earnings that shows up on stocks with years of neglect. It is a very powerful pattern which results stock going up 100 to 500% in few weeks or months, obviously our first choice should be the one that goes up in few weeks. On large cap stocks it takes few quarters for them to go up 50% plus.

IDSA was  very thinly traded stock with months of neglect prior to big earnings surprise.. It broke out on earnings day and in 17 days made 800% move. I did not have huge position like in other EP in this as it was really thin. But the 25% position  was still good enough position to make substantial  difference to the account.

Best Episodic Pivos are on low priced stocks with months or years of neglect and that have very low volume leading in to EP. The catalyst leads to buying frenzy and then it goes vertical. If you have small acount focus on these kind of lower volume stocks. 

BOOM is another example of this kind of explosive move post earnings. In 10 days it went up 400%. And in next 2 years after that first earnings it went up 20 times.


Not many ideas will show up daily like this , but you have to be alert everyday to the possibility of finding big idea like this. 14 big trades like these have contributed to 80% of my profit in last 14 years.

3 to 5 big 50% plus movers post Episodic Pivots can make your year if you risk sufficiently on them.

A stock with big catalyst like earnings can make 50 to 500% or more move in next quarter or two depending on how neglected it is.

The primary focus for pre market work should be to find such big game changing earnings or other catalyst stock.

In a year chances of finding such big ideas are 1 to 12 but just one such big trade can make significant difference to your account.

Look at FB last year. It had blowout earnings. Before that it was neglected stock. I bought 50000 shares in pre market between 33 and 33.40 and in few months closed it near 60. In addition I bought calls on it to magnify returns.

Few big trades like these can significantly take your acount up. And that is why pre market you should focus on these opportunities.

When looking for Game changing catalyst always look for situation that is likely to result in explosive move in short period of time. During peak earnings season there is always a temptation to look at every earnings, many of them are just day trade or few days swing trades. They are not real game changers.

A genuinely surprising earnings in most cases leads to big gap up and huge pre market volume. A stock up in pre market on below 50 k volume is not what you want to focus on. Similarly a large cap up on 50k volume is also not important.

The objective of finding game changing catalyst stock is to find a stock that will increase your overall account by 15 to 20% in one trade. Which essentially means the stock should be capable of big move and you should risk sufficiently big on it.

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 and give you significant rewards for your efforts.

If you want to make serious money trading focus your daily efforts on finding big earings breakout.


DIBYN said...

Great post..few queries..
How long do you hold earnings episodic pivots? ..
.do you use a trailing stop loss?...should one continue to hold during shallow corrections which will happen in between..?
How do you arrive at the Hold or Sell decision? ..with regards

Pradeep Bonde said...

As I said in earlier comment I arrive at possible target before putting trade. I always use stops and move them as stock goes up. I sell when stock hits my target or hits stop

DIBYN said...

Some stocks dont break out immediately after earnings or go sideways after only one big move on results day....if these stocks breakout later say prior to next quarter earnings shall we buy them?...does earnings play include such kind of stocks?

Pradeep Bonde said...


Unknown said...

What is the best way to go about finding good earnings report?

Pradeep Bonde said...

Four places to find free earnings information if you are trading Earnings Episodic Pivots