Know Your Earnings Dates

08/06/2008 12:00 am EST

Focus: STRATEGIES

Brian Shannon, CMT

President, AlphaTrends.net

Earnings reports are one of the largest catalysts for individual stock movement. What may look like a bullish setup to a trader one day can turn into a disaster the next day. On Monday, shares of Midway Games (MWY) broke out of a bullish flag pattern and appeared to be set up for continued upside as the stock was trading just below the highs for the year. On Tuesday the company reported earnings and the stock opened more than 10% lower, but that was just the beginning, it finished over 31% lower on the day! Betting on earnings is just that, a bet, there is rarely an edge in these plays.


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