Skip to main content

Posts

Showing posts from August, 2017

Earnings: How Trade Them Correctly

We are in the middle of earning season, a very exciting, profitable and yet, intimidating time for traders. Companies that beat analysts' expectation, perform better than expected, has higher number of subscribers, etc... are the big winners during earning seasons. The positive surprise generated by the good earning reports can oftentimes reverse a multi-month downtrend, push price to break stubborn resistance levels and even reach and move above record highs. The gains produced by these positive reports can give traders and investors double digit percent returns in just a few trading days, and sometimes even just in matter of hours. The image below shows NVDA chart, a semiconductor company who's stock price tripled in a few months, thanks to three positive earning reports. During that period, NVDA stock price moved from $65 level to $160 (+152%). On the other end, if the company misses their earning targets or analyst's expectations, the effect on pr