Yuengling's Ice Cream Corp (YCRM)

[SF971]

This kind of analysis is called liquidity cycle analysis. Understanding liquidity cycles can give you confidence to trade small and neglected stocks.

If you want to trade an earning breakout, it is extremely critical to understand that he trade works because prior to the earning surprise there was no liquidity.

Once you buy liquidity comes in as several others and funds who understand earnings importance join in immediately.

The liquidity will persist post the breakout if in market participants collective judgment that stock has long term potential.

… Within a matter of days a small and risky stock with low volume will become a liquid stock with several thousand shares traded per day.

Sometimes this will happen within minutes of earnings announcement and it will persist for months.

That is how liquidity works in the market and that is why I am not afraid of trading small stocks with big catalysts or big price increases or 100% growth because I know liquidity follows price growth.

https://stockbee.blogspot.com/2010/11/how-to-use-liquidity-cycle-to-find.html