Get Ready to Trade Big Earnings Surprises
This morning we saw one of the first semiconductor stocks to report this quarter, ASML. ASML blew away estimates on both the top and bottom line. Meanwhile, IBKR crushed their revenue projections last night by more than 10%.
ICHR, another stock in the semiconductor industry, pre-announced a huge blowout and they raised next quarter revenue guidance by nearly 20% on the top-line! A great start to earnings season.
This earnings season is looking like a real barn burner. We should see some monster numbers from top growth stocks and have fun trading some big earnings surprises.
Before jumping in on a strategy or trade, though, its always helpful to look at what is working in the current market.
Some of the characteristics that are working right now include at least low double digit earnings and sales growth with recent acceleration, a strong return on equity and a strong long-term uptrend. This is giving us a big advantage when trading strong technical patterns and breakouts.
Now if the stock also has a track record of beating estimates with rising future expectations, we become very interested in looking further.
The stocks featured recently in the Daily Alert that have the strongest metrics in these areas include ALGN, ADBE, OLED and ANET. All 4 are near the top of the list of growth stocks in the current market with earnings and sales growth recently accelerating into the mid double digits and beyond.
All 4 stocks were in very strong long-term uptrends when we featured them over the past month. And all were pulling back towards an uptrend support level. Once they confirmed a higher low and then a higher high on a daily chart, its was time to act.
After ANET reached our target entry point last month, the stock surged around 20% in less than 4 weeks. OLED made a more than 10% move from this technical entry point in a couple days. ADBE rallied about 10% in less than a week and ALGN has soared about 20% in about 2 weeks from our target entry point.
Again, the top growth stocks in great chart patterns are making a very nice initial move once they reach a good technical entry point.
We saw more bull flag patterns break out last week. We mentioned CRC in the closing remarks in the daily alert nearing the breakout point. After reaching new highs and breaking out of the bull flag, it quickly surged 10% higher within a couple trading days.
This kind of initial move is very common with this highly bullish chart pattern explained more on the site and blog.
DQ is another bull flag breakout featured toward the end of December. It soared about 25% from our initial entry point within about 2 weeks before pulling back sharply late yesterday morning.
Some of the Chinese growth stocks have been surging out of strong technical entry points as well. YY, featured in the Daily Alert in December, surged about 25% from the listed target entry point in about 4 weeks.
Again, growth has been where its at over the past few weeks and we expect some of the top growth stocks to set up some very impressive earnings eruption trades.
As earnings season starts, its a great time to learn the earnings eruptions trading setup. Last quarter we saw some huge moves out of this trading setup including ROKU which rocketed nearly 100% higher within a few days after reaching the technical entry point using this strategy.
The video course will give you the ins and outs of trading this powerful technical setup with a very high success rate while using a tight 2.5% stop.