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

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To: bobby is sleepless in seattle who wrote (99822)5/29/2000 2:03:00 PM
From: Long John  Read Replies (1) of 120523
 
I do not have all of May data yet, but April Earnings Plays returns were about average. The best month I saw during the past year was October 1999, where the average EP gained 24% in the month after earnings. The worst month was July 1999, where the average EP dropped to a -4% return one week after earnings and stayed negative for the next month.

I must note that for every month in the past year except June and July 1999, in good and bad markets, the average return for the first week after earnings was fairly consistent, between 0% and +5%. The first two days saw a rise, then there was a drop in average for 2 or 3 days. After that first week, the EP's tended to follow the prevailing market trend again. Of course there was wide variation between individual stocks, but I think these averages tell a lot about how stocks react to earnings. See also concentric.net.

John
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