Edgar Ambartsou...'s  Instablog

Edgar Ambartsoumian
Send Message
Learn to trade and invest professionally in one month at stockgym.com Upon completion of the academy, you should start earning 50-150% a year on your money following my methods on Lightspeed Trading.   I hold a BBA in Finance from UTSA, but I wish I had saved that money and put it into stocks... More
My company:
Stock Gym
My book:
$100,000 Is The Hardest Hill To Climb
  • Making Money Before Earnings Day Not After 0 comments
    Dec 8, 2011 9:35 PM | about stocks: AAPL, DG, ALOG, BMO, CASY, AZO, LDOS

    Jim Cramer always preaches how an investor should purchase equities or add to existing positions after the earnings release, not before.  Very true, however, if you are a short term trader, a strategy I found useful is to trade in and out of a stock 2-4 business days before the earnings release.  Why not make a short term profit before deciding to go in long term after the earnings report date?

    At times, the "prior to earnings" volume increases and the PPS move is pretty indicative as to how the earnings will turnout, but not always. I can't count how many times there was a major sell-off few days prior to earnings, then company beats analyst estimates and bears scatter into the woods before the opening bell the next day.  Opposite also holds true, a perfect example would be Apple's (AAPL) last quarter earnings results.  From October 13th to October 14th Apple rose from $408 to $422 a share with subsequent 5 million shares per day increase of volume accumulation before tumbling after missed earnings.  I did make a gain on that strategy trade, but went against my discipline and held some shares through earnings day by putting all my faith on the tech giant's consecutive and flawless earnings history.  Enough about me, let us take a look at some names that report this week and the possible gain that one could have captured in trading prior to earnings. 

    Company Average Volume Entry Date/Price Exit Date/Price Gain Earnings Date
    Dollar General (DG) 1,310,000 Nov. 29 $39.01 Dec. 1 $40.64  4.17% Dec. 5
    Analogic Corp. (ALOG) 65,742 Nov. 30 $52.29 Dec. 2 $56.64  8.32% Dec. 8
    Bank of Montreal (BMO) 906,525 Nov. 29 $55.20 Nov.30 $58.76  6.45% Dec. 6
    Casey's General Stores (CASY) 233,071 Nov. 30 $51.04 Dec. 1 $53.99  5.78% Dec. 7
    Auto Zone Inc. (AZO) 269,562 Nov. 29 $323.05 Dec. 1 $334.22  3.46% Dec. 6
    SAIC, Inc. (SAI) 2,120,000 Nov. 30 $11.77 Dec. 1 $12.14  3.14% Dec. 6


    Nobody knows how the earnings will turn out, but when the insiders and investors consensus cheer with optimism prior to reporting, you may detect that in robust volume and change in PPS, as well as accumulation/distribution line.  Scan stocks that report earnings in a couple of days from now and watch them like a hawk until earnings day to get a good practice on the strategy, but remember to stay on sidelines during that conference call.  

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Back To Edgar Ambartsoumian's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers


  • Love Apple's surprise u-turn. Bought 5 $520 april calls for 2K, sold them for 3K in 5 minutes. What a great day.
    Mar 6, 2012
  • Wow, Apple march call option holders got wiped out.
    Mar 5, 2012
  • Can anyone explain how a retail investor could've bought Yelp at $15/share at a private placement? day's low was $22, was it not?
    Mar 2, 2012
More »
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.