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Technology Stocks : Glenayre Technologies(GEMS)- a pure cellular PCS play?
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To: Leo Francis who wrote (1485)7/21/1997 10:36:00 PM
From: song deng   of 3431
 
Well, I think I need to explain it as simple as possible. Typical trading pattern before a firm release its earning without any preannouncements: (this pattern is for either meet or beat the expectation a little)

3 weeks -1 month ahead of the earning, you'll see firms buying bundles to jack up the price of the stock.

1 week before the earning: price continue to rise.

within 1 week or so: sell off on moderate to high volume on profit taking. On one hand, firms taking their profit from individual investors by selling off and force the price to be lower in order to buy them back after the earning is released.

within 2 to 3 days: moderate to low volume trading, constant price.
waiting for the announcement.

after announcement, if the earning or the forecast is good, stock will rise on high trading volume. If it is only ok, or the forecase is fair, the price will rise a little, then fall soon.

This is just a pattern model I observed from many stocks with fair or ok earnings. If the earning is spectacular, the pattern is roughly same, but the price will rise continuously after the earning is released. There are many different trading patterns you can observe for many different cases. But you can use such a general model to do a normal patterned stock. If you have heard people use math models to analyze stocks on wall street, you'll understand what I told you better.
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