Get Ready for Big Q1 Earnings Trades
Last April I was putting the finishing touches on the earnings eruptions course.
At the time we were seeing one stock after another explode out of this powerful pattern: I call it the earnings eruptions setup – a great way of trading earnings gaps.
This earnings trading strategy is not on stocks less than $10 that move 20% higher 1 minute and down 20% a minute later. Not at all. The moves are made on top stocks generating real earnings that have a strong tendency to hold the huge gains after a big earnings surprise.
After carefully identifying and back-testing the strategy rules for over a year, I then did a “forward test” of the earnings strategy to see how well it would do.
To my surprise, the strategy worked even better than the prior back-testing. During Q1 in 2017, the success rate was over 90% while using a tight 2.5% stop after around 2 dozen trading setups that met our strict qualifications.
Many stocks moved 15% to 40% within a few days after reaching the ideal technical entry point taught in the course.
And this was after the huge earnings beat so you don’t have to guess the 1 in a 100 stocks that will have the game-changing earnings report ahead of time.
Its my personal favorite day trading strategy for earnings announcements. It also a great strategy for swing trading earnings.
This year we are seeing very large estimate increases ahead of Q1 earnings season. Also, the market has pulled back as estimates have mushroomed. This sets up what could be one of the best earnings season to trade in years.
Thousands of companies will report earnings this quarter but only a few dozen will have game changing upside surprises and guidance updates.
Some of those will have a very strong pre-market chart pattern, the right long-term technical pattern and other factors that make the stock more likely to make a huge move from the opening price the trading session after the report is released.
In November we saw ROKU soar nearly 100% from the ideal technical entry point out of this pattern within 3 days. A huge move without the volatility and risk of stocks under $10. Here is the training video review of the trade.
We called multiple big earnings beats for ALGN over the past year in the Daily Alert. It also set up the earnings eruptions trade on multiple occasions. The following video reviews one of those trades.
With this earnings season trading strategy, you can take a larger position size with a tight stop-loss and score some very big winners in the weeks ahead. Start getting ready for what could be one of the best earnings seasons to trade in years.