Market Gems:Stocks w/Strong Earnings and High Tech. Rank Message Board

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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank

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To: Joan Roth who wrote (21684)	1/11/1999 11:39:00 AM
From: Jenna	of 120523

Joan..http://www.marketgems.com/gemsonsi.html I've carefully compiled scores of articles I've written on earnings plays during the past 2 years.. It's not something you can sum up in one post. I've also been very careful in holding stocks through earnings.... In most cases I've been overcautious..There is no 'rule of thumb' for holding through earnings. The basic tenet is still that if a stock has run up on anticipation it is time to sell BEFORE earnings. This is based on average stock.. the overused but still valid phrase: "Buy on the rumor, SELL on the news".. it is more so the case for technology hi-flyers than your company through earnings I have recently held CTAS (the largest uniform company in the U.S.) and an earnings play for two seasons in a row and has an incredible record of 28 years of consecutive earnings growth through a full page report in Investor's business daily AFTER earnings and watched it rise in my portfolio from 52 to 72.. Just an example of an 'unexciting' earnings play that played a good hand... Earnings Plays are the best plays mostly because you are sure to have a price move in an otherwise laggard, or low volume stocks.. Stocks have 'awoken' and done well during an earnings week. Here you have to balance your technical picture as well as your fundamental strength. A stock like GUC, TOM will supercede its technical rank, and althought they were technically overbought during the time of their report, they continued to surge amazingly.. But here again the 'rule' would be that if your stock is at its 52 day high with overbought signals in indicators (trending and oscillators) you might have less of a chance for a continued run up AFTER earnings. I like a stock that is about 10% off its highs with good fundamentals and as few overbought indicators as possible, preferrably none pointing to overbought status... I personally tend to prefer 'underfollowed' earnings plays that are not consistently in the news like POWI, CREE, AMCC, QLGC, and VRTS.. sometimes the others like COMS,DELL,AMD and YHOO can be mentioned so much that there is really no 'anticipatory upswing' left for the actual earnings report...

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