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It seems quite a few companies I follow beat estimates and revenues for the current quarter but they get slammed when low guidance and high estimates are projected for the coming quarter. This happened to Take Two ($TTWO), Apple ($AAPL), and AMD ($AMD).

Usually these stocks rise into earnings in expectation of good news and sell of viciously afterwards. Estimate revisions and hype also tend to build into earnings.

How can we profit from this trend? First, have a list of solid companies to follow that are in your opinion fundamentally undervalued. Buy after earnings when they get beat up. Wait for the stocks to move up. After the stocks move up, sell the day before or the day after earnings.

In this case it happens to work best when there is uncertainty on the future products a company will introduce. All three of the stocks mentioned above meet this criteria.

It also did not help that general market sentiment is in a negative direction. That also matters.

Disclosure: I am long AMD.

Additional disclosure: I am a frequent trader. I may buy or sell positions in any of the above at any time.