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Trading Earnings on Stocks – By the Charts

October 24th, 2013

Hey it’s Sasha Evdakov and thanks for joining me. In this video we're going to discuss trading earnings and we're going to go chart by char. So this is October 23rd and in here when I want to discuss is talking about earnings.

Now if you haven't had a chance to watch my video regarding earnings go ahead and check it out in the channel and it's just when I made with my face explaining about earnings, and I'll give you a little bit of inside but again to recap, earnings is when the news reports come out for the stock and it usually happens four times a year January, April, July and October.

The stocks they can do anything even if earnings are great, that stock can still go down, and if the earnings are bad the stock can still go up. It really doesn't matter. You have to watch the reaction of the earnings, not just the earnings themselves but the way the market reacts.

In this video want to talk about a couple different place and we'll start with Boeing mostly because I was trading it here today. And if you take a look at Boeing, it did a phenomenal break over here at that 107.80, and if you got in it then fantastic, congratulations, i didn't. I missed the move there on that one.

It continued higher, consolidated here, and we're looking at the daily were trading of the daily and then here again earnings came out. Now if you take a look at earnings, if you wanted to get in this look at the volume spike here.

I'm always talking about volume and the volume came in was pretty heavy. Now the thing that i watch was a couple different levels, I watched this level at the open and then you can see how I tried to hold this region and hold this level at the 127 but also this level.

If you got into this stock I would use this because it gapped here, I would use this just a little under below that as your support level. Now Boeing, it’s a slow mover and if you didn't get it right away have to give it some room because you just got in it right now and earnings just happened. So you need to be patient

I know that we sometimes get excited, even me as well. I mean I had many failed trades myself and you know sometimes we get excited and we get out too quick, we get in too quick and you have to let things develop and evolve.

Sometimes, if you're struggling, and if you're hesitant, sometimes you just have to close your eyes and pull the trigger, if you know it's the right thing to do and if you plan the trade out before you got in it but if you're nervous you got to get those emotions out and get rid of them.

Looking at CMG

Now I want to talk about CMG. You can see what happened here. Earnings came out look at the volume spike here, fantastic monster run. It went from 440 to right around 480. I talked about this in my video and then from there right when it open, let's just take a look okay.

Looking at this one here moving over, right here is when it went, we had a thirty-point run from here 470 to about 510, a 30-point run at earnings and now the stock continues, it’s continuing into strength and continuing, it’s making new highs.

Again, look at it right here the last few tips, this is what earnings due to companies and that's why you have to be patient. Now on the flip side look at Netflix, look at what happened to the stock, earnings were pretty good but the CEO came out, and so the stock might be a little overvalued, and now the stock is tanking.

Now, yes today it’s bounced a little bit but probably all the short sellers that are bouncing it, the volume is pushing it lower. Again let's take a look at it real briefly. Looking at a here earnings came out, right here, stock opened high and it starts to trend lower.

You can see that from here to here the stock tanked and it bounced 30 to 40 points from the previous days close. So from here went them 353 to about 390 and then from 390 it went back and erased all that, that’s thirty-point, and then went another 30 points, that’s a 60-point run in a day.

That's huge and if you caught that run oh my goodness you would have made some great money. Now of course we can’t catch every single run, it's just very difficult to do but what earnings does, is that it allows you to really see the reaction in the action that’s happening within the stock, it allows you to reposition yourself.

Now you don’t have to get in it right away on that first day, you can get in it on the second day.

Take a look at CMG, you didn't have to get in on the first day, you can get in on the second day. Look at the third day, look at what happened a third day, right here. We create this little pattern right there and it popped higher and look at that fourth day continued higher.

So this is what happens, this is what you do when you're watching our earnings. You don't play it before earnings. Again, I would liquidate 90 or 100 percent of your position before earnings. Personally how to get out of all a it before earnings because you don't know what's going to happen.

It could be like Netflix or it could be like CMG, you don't know, you’d never know but what you do have to know is stick to your stops, stick to your rules, and then trade on the action, trade on the behavior and see what's happening, and then you go large.

You don’t have to trade every day. You can trade once a week and you only need a few good stocks per year to make your year and just write them. You might have to just sit for three months, you may have to sit for a couple weeks.

Take a look at the Down Jones, if we look at the daily you can see we're in this range and right now we're pushing up towards this higher level and we could be hitting some resistant over here sooner  or coming in to the overbought level.

S&P

If you take a look at the S&P, again we’re at the highs, the highs of ever. I mean this run, stocks go up and stocks go down, they don't go up forever. They make new patterns, they create new chart patterns, they create new support levels, and you have to watch out for topping action and it takes a couple days for the top to figure out where it’s at, and it takes some time, keep an eye out for them.

I just want to share with you some minor thoughts, about the earnings plays, some people are confused regarding earnings. If you don't know how to trade properly or you're not in the market that long, maybe a couple years or less than a couple years you might better be staying out of the market during earnings season or during the earnings.

Check out the website and see when the earnings come out and when earnings get released and that way you know when to I avoid the trade, so that way you don't get burned like a Netflix, you never know what's going to happen.

That's my thought and I hope that you get some insight about training earnings during this video. I hope that was helpful and I hope you trade profitably this week. If you're not trading, then by all means stay in cash, there's nothing wrong with that but push yourself to get better each and every time.

Learn something from each trade and then you will move on to the next level.

That was my insight and I wish you well and I know that you can do it.

Alright! Thanks for watching, and if you have any questions feel free to email me, feel free to just shoot me a contact form at Tradersfly.com

Thanks Again!

Author: Sasha Evdakov

Sasha is the creator of the Tradersfly and Rise2Learn. He focuses on high-level education speaking at events, writing books, and publishing video courses on business development, internet marketing, finance, and personal growth.

I'm Sasha, an educational entrepreneur and a stock trader. In addition to running my own online businesses, I also enjoy trading stocks and helping the individual investor understand the stock market. Let me share with you some techniques & concepts that I used over the last 10+ years to give you that edge in the market. Learn More

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