Marketgems Earnings Trader- Trading Strong or Weak Earnings Growth

[jenna]

Educational experience Gaps and Craps: Usually after 'earnings runs' and again of course after the report. Buy the news, sell the report, we didn't invent it surely, and we have variations on that theme but there is rarely a stock (INSP, CCMP, CREE, JNPR for a while that soared but mostly even the double digit gainers have pulled back to way lower losw, so how much more so those companies that gapped 'n crapped (ELX, MRVL, QLGC, INTC, YHOO, AMZN, INTU, PNRA, KLAC, KLIC etc) can be accumulated in the midst of the breakdowns? You can see our list about above 25 stocks since December 5, many of which were gaps 'n craps and continuing short/put plays for weeks following the report.


The Gap Down n Crap


Many of these start with a gap up, some start of course with a gap down and crap further. Both play out just as well as long as know to expect a potential "short cover rally" by 11:00 or so and reshort again later on.

and here is a very typical chart of the gap 'n crap after the report. We had that one illustrated perfectly with TGT, ERES, PNRA, INTU and the star "AMAT" which led to a chain reaction of shorting that is still far from being over.


This "CHK chart" illustrates that now we are taking our earnings plays "out into the field" comparing the odds of gaps 'n craps on intraday charts in historical price charts after prior reports, and not just general pullbacks on daily charts.

The Gap Up and Crap