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An upside move in Hovnanian Enterprises (NYSE:HOV) in tonight's after-hours trade bodes well for longs on Wednesday as the stock has consistently added to its earnings-driven evening gains in the next-day trade over the last seven years.

HOV has recorded an earnings-driven after-hours gain in 9 of the 25 quarters tracked in our database. In six of those quarters, or about 67% of the time, HOV has followed that gain with a more robust upside move the following day. So if it's up tonight, prepare to build on it.

The negative trade off HOV earnings is a tougher call as the stock is about evenly mixed in its next-day trade. It has seen an earnings-driven after-hours decline in 16 of the 25 quarters we've tracked, crossing more aggressive next-day declines in eight quarters, reversing direction in seven quarters, and recording one evening decline that was matched in next-day regular session action. In other words, if it heads lower tonight keep a sharp eye on the ranges as a hard floor could foreshadow a next-day bounce.

HOV is due with its Q1 results after the close today. The Thomson Reuters mean analyst estimate is for a loss of $0.61 per share on revenue of $245 million.

Here's the history:

On Dec. 21, 2010, HOV fell 2.5% in after-hours trading after reporting a wider-than-expected Q4 loss. The stock closed the Dec. 22 regular session with the same 2.5% decline.

On Sept. 1, 2010, HOV advanced 1.9% in after-hours action after reporting a year-over-year decline in Q3 revenue and a narrower loss. The stock firmed higher in the next day's regular session, closing up 5.4% on Sept. 2.

On June 2, 2010, HOV slipped 0.6% in after-hours trading after reporting a year-over-year decline in Q2 revenue and a narrower loss. The stock headed deeper in the red the next day, closing the June 3 regular session down 14.3%.

On March 2, 2010, HOV advanced 3.7% in evening trade after reporting Q1 revenue in line with expectations. The stock added to its upside the following day, closing the March 3 regular session up 4.2%.

On Dec. 16, 2009, HOV slumped 8.9% in after-hours trading after missing Q4 expectations. The stock cut its downside the following day, ending the Dec. 17 regular session down 6.3%.

On Sept. 2, 2009, HOV shed 8.6% in after-hours trading after missing revenue expectations. The stock headed deeper into the red the next day, closing the Sept. 3 regular session down 12.9%.

On June 2, 2009, HOV declined 2.6% in after-hours trading after reporting a rise in Q2 revenue on a narrower loss. The stock added to its downside the following day, ending the June 3 regular session down 6.6%.

On March 10, 2009, HOV declined 1.6% in after-hours trading after reporting a deeper loss on weaker revenue. The stock reversed course the following day, rising 8% by the closing bell on March 11.

On Dec. 16, 2008, HOV declined 9.4% in after-hours trading after reporting a deeper-than-expected loss and missing revenue estimates. It cut back a good chunk of that decline the following day, closing the Dec. 17 regular session down 5.3%.

On Sept. 3, 2008, the stock fell 10.3% during evening trading after HOV reported a wider loss and lower revs than the year-earlier period. The loss swelled to 17.4% during the regular session the next day.

On June 4, 2008, HOV declined 6.9% in pre-market trading after reporting a weaker year-over-year Q2. The stock headed lower in that day's regular session, finishing down 10%.

On March 10, 2008, the stock gained 3.1% during evening trading as revenue below year ago but beats Street view. The gain swelled to 16.4% the next day.

On Dec. 19, 2007, HOV fell 6.5% after a sales beat but a loss per share much wider than the year-ago quarter. The regular session loss was a deeper 11.4%.

On Sept. 6, 2007, HOV gained 3% in evening activity after meeting Q3 sales estimates but reporting a loss from a profit a year ago. Shares gave up all those gains and more the following day. HOV ended the next regular session down 7.1%.

On May 31, 2007, HOV lost 1.8% in after hours trading when the company reported a wider Q2 loss than expected with revenues about meeting. Shares fell further the next day and closed the regular session down 4.5%.

On March 8, 2007, HOV edged up 2.9% in night trading after reporting a Q1 profit without items and forecasting a Q2 loss. However, shares could not hold onto that upward momentum and fell 4.1% during the next day session.

On Dec. 18, 2006, the stock fell 4.8% in the evening hours after the company reported a swing to a loss. The loss was reined in to 1.9% the next day.

On Sept. 6, 2006, shares were up 1.3% in the evening hours after the company reported ahead of the Street with its Q3 results and guided for FY 2007 EPS in line with forecasts. The gain expanded to 6.3% the next day.

On May 31, 2006, shares were up 1.2% in the evening hours after the company reported ahead of the Street with Q2 results. The stock advanced 4.5% the next day.

On March 1, 2006, HOV gained 1.4% in the evening session after reporting Q1 EPS a penny ahead of the Street. Its guidance was updated to reflect forecasts for a slower home-building market. The gain narrowed to 0.6% the next day.

On Dec. 7, 2005, HOV slipped 1.4% in night trading after the company beat Q4 estimates but guided for lower-than-expected Q1 earnings. Shares regained some ground the next day, ending the regular session up 0.08%.

On Sept. 7, 2005 HOV lost 7.8% in after-hours trading after the company missed earnings expectations and set a weaker-than-expected EPS view. It narrowed the downside slightly on Sept. 8, closing the regular session down 6.8%.

On May 31, 2005, HOV fell 4.5% after hours after beating the First Call Q2 EPS forecast by a penny but falling short on revenue. The stock found somewhat more support in the June 1 regular session, slipping only 2.1%.

On March 2, 2005 HOV was up 1.6% after the company reported results up from year-ago levels and raised its guidance. The stock edged up a bit more the following regular session, closing the March 3 trade with a 1.9% rise.

On Dec. 7, 2004 HOV slid 0.3% in after-hours trading on the back of higher year-over-year results and guidance ahead of expectations. The stock maintained its descent on Dec. 8 and ultimately lost 3.3% by the closing bell.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Longs Can Build on Hovnanian's After-Hours Gains

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