Shmulik Karpf's  Instablog

On January 25th, I recommended my strategy on how to make 4% a week during this earnings season.

In this article, I explained that the golden path to earnings is to only trade once the odds are in your favor. What I mean by that is to only trade companies which have a proven record of robust percentage change in stock price on the earnings day itself. Short those stocks on the day prior to their earnings report.

We implemented this strategy on ATW last week and we made 3% a day.

Our next candidate was- ITMN. We shorted it prior to its earnings announcement on Thursday, after the close.

The company reported missing earnings and the stock lost almost 6%. For any of you who have not yet closed the short (bought to cover), this is the time to do so.

We got ourselves another winner overnight.

Freeport-McMoRan Copper & Gold (FCX) is the world's leading copper company. After taking a beating in the second half of 2011, it is now nearing a breakout pattern.

Buy FCX above $42.5, take profits at $45. Set your stop at $41.

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

One of the greatest mental obstacles that a trader faces is shorting a stock that he previously bought long, and vice versa. Often, that is exactly what separates a novice trader from a professional one.

On January 2nd, I recommended to take profits on our long trade in CHRS. We ripped 36% on this trade in 33 days and I decided to take profits and wait on the sidelines for a possible re-entry on a dip.

Since we exited the trade, the stock gradually started to decline and it is now showing signs of a strong downturn momentum: The stock has no technical support between the price levels of $4.5 and $3.4, it experienced an upward Gap at the $4 area that has yet to close, and the stock tends to spike or plunge in highly violent and swift waves. 




Now, it is imperative to emphasize that in contrast to previous short recommendations on BKS or NFLX, this time- I have not found any inherent accounting issue with Charming Shoppes, Inc. This trade is based on a technical- statistical basis only and we are making this trade since the odds for a plummet are stacked in our favor.

I recommend to short the stock ONLY if the price of $4.5 is triggered. The entry price in that case is $4.45. The stock is currently trading at $4.7

I will maintain timely updates on this trade.

Disclosure: I am short CHRS.