Marketgems Earnings Trader- Trading Strong or Weak Earnings Growth

[jenna]

NEVER buy a stock that reports earnings some time in the future (a number of days) for an "investment through earnings" That's very unsound trading strategy. We look to buy CHEAPLY (off support) and SELL THE HIGHS.. trading the stock A NUMBER of times before the the company actually reports and ALWAYS in the prevailing trend NOW and not hoping for some "X" target in the future.

Last night after ADI was covered, we saw a BUYING OPPORTUNITY because of the pullback and got some cheap call options in DELL and ADI. Soon we might have some buying opportunity of cheap calls again, but PLAY THE STOCK IN THE PREVAILING TREND FIRST we called some downside today early in some earnings plays and that downtrend is not finished yet, we're not even contemplating the long side just yet. We 'milked' ADI and NVDA for all we can get, while virtually leaving DELL alone until later last night.

If you buy 2 or 3 days in advance the time earnings comes out you'll already be down 3 or 4%, averaging down and ending up in a gap 'n crap or even worse something like ADIC. Play THE TREND, the earnings play is a 3-pronged strategy and you may consider the stock long or short the DAY BEFORE the report, don't just buy dips to have them dip lower and lower and lower.