Exactly which is what you are describing; Anticipatory Upswing . RPC, CMCSK, ADLAC were all uptrending BEFORE the earnings report. I also do not choose stocks that are already toppy and exploding with the results of the 'good news' but rather turnaround plays like UN today which was really in a downswing and NN, LOW and ADLAC were coming after corrections. They are usually either oversold or in the first stages of an uptrend. We even used 'bad earnings reports' for our gains and tomorrow is my third day of holding TRVL and GVA with nice gains which I picked up AFTER they finished their downtrend and AFTER they reported.
I didn't even have to hold SDLI, AVID or KSWS through earnings but jumped upon them the morning after earnings came out. That is why I print the lists a full 7 or more days before the stock reports, by the time the stock reports, I'm out. I'm already taken positions in 10 stocks last week and today that are reporting earnings through Friday I already sold 4 today and two on Friday, and the will get out of most of of the other 5 in 1-3 days BEFORE they report. KING and SONE were good bets but I sold ADRX after only 3 days. Not one of the stock are technology related, but rather retailers, or consumer nondurables, restaurants, casino/hotels, NN (turnaround)etc. In the last week while everyone was chasing the technology sector we were in a variety of telecommunications/cable and broadcasting /media restaurant companies that all did very well.
I have held about 20-25% stocks through earnings and missed 1 this month that I should not have held but I only had a small postition in that one because it had a 'history' of volatility before and after earnings. I felt those 4 were relatively safe although I had taken profit in more than half my position before earnings. And yes when they report that they expect to they will beat estimates is when you get in, which is when I got into RPC and a few others. I usually print those 'pre-reports' on the newsletter and ANF did declare that were comfortable to beat estimates.
We have never advocated holding through earnings. Earnings plays are just one side of the 'trading coin' which consists of momentum/fundamental plays that are reporting earnings or just our regular good plays like BYND, NETG, DRIV, and some others that have high intraday price ranges and histories of being strong performers. |
