How to find big winners using pre market gap stocks
Big winners are triggered by earnings releases. Stocks with rapidly growing earnings attract buyers and funds attention on earnings day if the earnings were massive acceleration.
The stock will gap up and go. Which makes your life even easier as you just have to focus on handful of stocks up 4% plus pre market. Investigate their earnings release and see if there is a "Massive Earnings acceleration" surprise.
"Massive Acceleration " married with months of base or "neglect" is what produces big moves as funds buy these stocks aggressively . If you can find these stocks on day of earnings , you are smarter than the smartest money on the street . And all it takes is 10 to 15 minutes of running a process to find these.
MAGNA
MA massive earning acceleration
G gap up
N neglect of few months to years
A sales acceleration
Look for these criteria in any gap up..
In order to do this successfully you need very streamlined process. If you just tracked these handful of links you should be able to find big winners periodically.
- Zacks Earnings : https://goo.gl/CsJviq
- Seeking alpha earnings news https://goo.gl/zkAKiB
- Zacks Earnings surprise charts https://goo.gl/xgXYAj
- Earnings Whisper email summary : you need to sign up for this . it is free https://www.earningswhispers.com/
- IBD highlighted stocks with good earnings https://www.investors.com/ paid
- Marketsmith (paid)
A blowout earnings stock will not be missed if you do this daily.
Most will gap 8% plus and go up 20 to 50% on earnings day itself.
I many times buy these kind of stocks in after hours or pre market itself.
If you missed the first day move , you can wait for it to form a valid anticipation setup and buy it or buy it on valid 4% or $ b/o.
If you have Marketsmith you can scan for such stocks and create a watchlist. I have shared a scan for this in Marketsmith scans document.
Pay special attention to stocks that gap up with MGNA criteria and volume above 1 million on breakout day. Even better is b/o with 10 million plus volume. The real big ones will often have That indicates massive fund buying .
Pay attention to first or second "massive Acceleration"
Five to ten big ideas like this in a year can make you year.
And all it takes is 15 minutes...
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15 comments:
Earnings whisper sign up summary, could you please mention the source or provider. Thanks
Could you please specify where can we sign up for the whisper summary. Thanks
https://www.earningswhispers.com/
I have been using this strategy for five years. Every trade recorded, the results are simply mind blowing.
This is the only method I trade and it has produced phenomenal results over the last five years. The only additional element I look for is that it gaps to a 52 week or ideally all time high. Reduced the universe of set ups and increases chances of set up working. This combined with a good dose or margin and fixed fractional position sizing and you've got a great system. 5min a day it takes me or 10-15min a day during earnings times
Yes it is very good method.
would $Ven and $APEI meet this MAGNA requirement to be winners?
$VEN, gap up, Neglect of few months, earnings might not be great but I think could be a surprise, checked at zacks show a 10% positive EPS surprise
MA massive earning acceleration
G gap up
N neglect of few months to years
A sales acceleration
What I can see, both of them are low float.
Thanks for sharing and teaching, I want to learn about this method, much appreciated any comments.
Marina
would $Ven and $APEI meet this MAGNA requirement to be winners?
$VEN, gap up, Neglect of few months, earnings might not be great but I think could be a surprise, checked at zacks show a 10% positive EPS surprise
MA massive earning acceleration
G gap up
N neglect of few months to years
A sales acceleration
What I can see, both of them are low float.
Thanks for sharing and teaching, I want to learn about this method, much appreciated any comments.
Marina
no both did not have Massive Earnings acceleration. I look for 100% plus earnings growth candidates only.
Other stocks with high short interest also make big moves like APEI. but then it should have been bought on earnings day , not now.
Thank you Padreep for teaching and for everything you have shared, much appreciated.
Hi Pradeep,
thanks for for sharing your viewpoint about VEN and APEI. I wonder ... may you indicate an example of a good candidate with MAGNA characteristics in the recent earning season ?
Thank you
Paolo
Hi Pradeep
Couple questions
On zacks link which column to you look for earnings acceleration
On zacks link certain stocks have an * do you avoid these stocks
How do you find stocks with sales acceleration?
Hi Pradeep
I also use finviz to scan for b/o
Avg vol= 300k
Current vol = 10million
Up = 10%
Any other suggestions to add to scan?
Thank you
Zacks look for surprise column. Then I check the earnings on them on other sites like Marketsmith and Seeking alphato find acceleration and sales acceleration.
Ron
I do not think Finviz is going to help you find these pre market.
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