Swing Trading Summer Sale!
August generally has less trading and investing activity which causes a lot of great stocks to not move much even after a big earnings beat. This sets up some great swing trading opportunities for beginners starting to use our strategies.
Although the setups meeting the criteria in the earnings eruptions course did very well overall, a lot of great stocks pull back after a great earnings report in early August. Recent examples of this phenomenon this August include NVDA and SINA. These did not gap high enough to qualify for an earnings eruptions trade but they likely would have during other times of the year when volume levels are significantly higher.
If we do not see a bearish market signal, you generally see some great opportunities by mid to late August on these stocks. As big fund managers come back from vacation, they start buying some of these stocks that are raising guidance and crushing their numbers.
A big earnings beat is like a giant neon sign to fund managers. The sign says “look at me I am better than you thought”.
It gets attention. The big money evaluates the new upwardly revised numbers and begins to put large positions on in some cases.
If they already own the stock, they often add to their position. Smart managers know its normally a good idea to add to positions after the company beats and raises guidance.
If you are just learning swing trading as a beginner, its important to understand what moves stocks.
Its not the earnings beats. Its not economic factors. Its not political factors. Its not the technicals or chat room pumps.
Its institutional money managers deciding to take a position in the stock. It takes the buyers overwhelming the sellers to move a stock price higher. Mutual fund and hedge fund managers have this buying power more than any other market participant by far. And they tend to buy and hold instead of dump it soon after purchasing like day traders.
Big earnings beats and a guidance raise will get their attention and cause them to start accumulating large positions in many cases.
Now most stocks will pull back after the initial surge on a great earnings report. After the pullback, many will start another big move higher. Others will just pull back after the earnings pop. The question is, which ones will move a lot higher?
This is where technical analysis comes in to play. Fund managers will determine which ones make a big move and a manager cannot buy all at once. If they did, they would push the price up too far too quickly.
You can get a good idea which stocks are best poised to move based on the numbers. But what matters is what the fund managers do. And their tracks are clearly visible on a stock chart.
For instance, LRCX just beat earnings expectations and has been accumulated by fund managers for over a year. The price pulled back after the earnings report, rallied a bit and then pulled back again to form a higher low.
The price then gapped higher and reached a key technical entry point explained more in our swing trading course. Its up a few percent already since we featured it Monday evening. MKSI did the same thing for us last week when we featured it as our #1 trading setup.
CORT is surging now and is up over 20% from our original entry point.
My point is that you want to find a stock beating earnings big time in a strong technical pattern and long-term uptrend. And in August there is often a delay between the big beat and when the institutions start to accumulate the stock.
You can scour the market yourself for these gems near the right technical entry point to improve your odds. Or you can let an expert with over 10 years experience do it for you.
If you are like most people, your time is very valuable to you. Whether you are a beginner or advanced swing trader, we can save you hours per day trying to find the best setups after a big beat. And right now you can get a full month of about 5 carefully vetted trading setups per week at a huge discount. Only opportunities that have the rapidly improving fundamentals to support a large move higher.
In addition, our summer sale also gives you our book covering our long-term swing trading strategy for free.