You read TheEdge, “The Market loses steam.” Should it come as any surprise? No. Why? Check it out yourself in my community.
Buying / Holding into Earnings is nothing more than buying, holding, selling, taking profit, avoid entering the trap and prevent greed. The condition is that you know the earnings release date. You plan and create your trading strategies.
The upwards move towards the earnings release date is Buying into Earnings — the higher price to factor in this movement.
Not moving up towards the earnings release date is Holding into Earnings —
Holding appears after Buying into Earnings. Be alert.
Holding seen about Buying into Earnings to start. Be prepared.
Closer to the earnings release date. Be cautious.
Isn’t it simple? Yes. Why? Simple yet need patience.
One good example is Netflix. Another instance before it happens. That is, Beyond Meat Inc is confirmed to release the earnings result on 29 July after market hours. How does Holding and Buying look? What is that rectangular box? What is that arrow mean? It’s simple. Figure it out yourself.
Netflix earnings miss recently because of some reason, the stock price gap down big time and continued to sell down a few days then recovered to the previous high. Beyond Meat Inc is different from Netflix. What if Beyond Meat earnings due to any reason, then the result tells us is miss, slightly miss, beat or beat somewhat. Whatever reason to be, the stock price gap up, it will be 20-25 points. If the stock price gap down, it will then be at least 40-50 points then smash. Will you buy or sell closer to the release date? If you are greedy, you sell? If you buy, you trap in chasing to go higher. With this in mind, you avoid the trap of chasing and avoid getting greedy.
This strategy fits many traders. Nowadays, I seldom use it. Why? I know myself well. I have no patience. The market is merely full of opportunities. I like to trade after the earnings result because I can read the report and I make the decision about how the stock reacts for the night. I am satisfied with the profit of 10 points or lower.