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Earnings season has officially begun, and it's my favorite time of the year. For about 4 months out of the year, I purchase stocks before earnings that I believe will exceed expectations and post large gains, based on previous performance and recent developments. Over the years I have used earnings as a way to return very large gains in short-term trades. Since the market has traded on fundamental progress over the last couple of weeks, I am very excited about the next four weeks.

When Q3 earnings were being announced, I wrote a series of articles in which I chose stocks that would trend higher after earnings. These articles were week-by-week and started with an initial $10,000 investment which was split into several stocks per week, and was then used, with gains or losses, the following week to make new purchases prior to earnings. To make the returns more accurate, I actually purchased each of the stocks that I recommended prior to earnings, with the same percentages, and then based the week-to-week returns on my own gains or losses.

Last quarter was the worst return I have had since I began trading earnings back in 2009, with a total return of just 8%. The quarter was difficult because there were several companies that would easily exceed expectations but would then trade lower with the market because of volatility being so high. Therefore, I learned to hold some stocks past earnings to capitalize on lost gains.

I believe this quarter will be much better for gains -- and since the market is trading more balanced -- I have decided to double my initial investment to $20,000. The problems that plagued the market four months prior are still a large factor within today's market. However, it does appear that investors are attempting to trade stocks based on fundamentals and not European debt. But since the same issues are present we must take into consideration our experiences during Q3 and invest to return consistent gains without taking too large of risks. Therefore, I will not invest large sums of cash into speculative or momentum stocks. If the week prior returned large gains within the market, then I will invest more cautiously in larger cap stocks. With that being said it's time to begin selecting the stocks to buy for this earnings season.

My first week playing earnings is going to be used as more of a learning experience to see how investors are buying stocks. Europe is back in the news now that nine euro zone nations have received a credit downgrade. This is important because now bonds are starting to become more volatile, and I fear that because of this downgrade the market may trade lower during the week of January 16. Therefore, I plan to purchase safe investments, or companies that have a long history of beating expectations and trading higher on the results.

Since this is my first week of investing on earnings I am going to play it safe and use this week to identify trends. However, there is one company that I don't feel is necessary to play safe, and that is Google (NASDAQ:GOOG). Google has consistently beat and exceeded expectations, in 4 of the last 5 quarters, and the company's growing faster than ever. The company's expected to report earnings of $10.48, which would be an all-time best. My only concern is accounting charges that could impact the bottom line as a result of several acquisitions. However, I am confident in this company and believe it's possible for GOOG to post another 25% gain year-over-year. Therefore, I am investing the majority of the $20,000 into GOOG-- approximately $13,000, because in my opinion it's the safest pick of the week. With a recent fall in its stock price, it's well positioned for a 5% gain following its earnings report on Thursday.

I've always made fun of eBay (NASDAQ:EBAY) and considered it to be more of a super-fleamarket than a publicly traded retail company. Regardless of how I feel, the company does post great quarterly earnings. eBay has met or exceeded expectations during each quarter for the last three years, according to CNBC. The company will announce earnings on Wednesday and is expected to post an EPS of $0.57 and revenue of $3.2 to $3.35 billion. I don't believe the expectations are too high, and because of eBay and Paypal's success throughout the holiday season, I anticipate both top and bottom line numbers to be great. In addition to strong earnings investors will be eager to hear how the company plans to utilize its new purchase-on-invoice company BILLSAFE, which I think will be transcendent for the company.

There are a lot of catalysts for future growth, and depending on what is said during the conference call, these could impact the direction of the stock. I am purchasing $3,000 worth of shares because, although I anticipate the company will exceed expectations, sometimes investors care more about what's said during the conference call than the actual numbers. Either way, I doubt the movement will be too significant, but it's more likely to trend higher.

American Express Company (NYSE:AXP) will announce earnings on Thursday and is expected to post an EPS of $0.98. In a financial sector that's lost 27% of its value over the last year, AXP and other stocks alike have returned gains because of strong global growth and consumer spending that continues to rise. The company has beat expectations in each of the last three quarters, and I have no reason to believe the trend will not continue. I believe the stock is presenting significant value, therefore I am purchasing $4,000 worth of shares, and I will use the earnings of this company as a guide for similar companies who will announce earnings in the coming months.

In the past I would always purchase at least 5 stocks in any given week. But as I said, this week is a time for identifying trends. Since I think GOOG is one of the most sure gains in the market, prior to earnings, it seems like a no-brainer to invest the majority of my trading balance in this stock.

My eyes will be on three companies that report earnings this week: American Express Company, Citigroup (NYSE:C), and TD Ameritrade (NYSE:AMTD). These three companies will give us insight on how to play the future earnings of other companies that will announce in the coming weeks. If American Express announces strong earnings, then it could mean stocks such as Discover (NYSE:DFS), Visa (NYSE:V), and Mastercard (NYSE:MA) will perform well after reporting its earnings. The investment services industry is very oversold and undervalued considering its growth. Therefore, if TD Ameritrade posts strong earnings, it may give us insight into similar companies. Lastly, Citigroup will announce on Tuesday. We already know that JP Morgan's (NYSE:JPM) revenue was short, and that large banks usually report similar earnings. Nevertheless, I still want to see how C responds, which will tell us how to play other large banks. This is a good week for earnings, with several large companies announcing. Therefore, it's wise to use this week as an opportunity to play safe stocks and to identify trends within various industries. Then we can become more aggressive in the coming weeks.

Source: Stocks Worth Buying Before Earnings: Jan. 16-20

Additional disclosure: All information regarding expectations, previous performance, and earning dates was obtained from CNBC.