An example of an Earnings Winner *updated

Just stopped for the night and took a look at my scan of Percent winners on the day and Tim's Profitly web profile page. Appearing was this stock PEIX that was an earnings winner.

 As you can see in the report, they reported record earnings on the 4th just after market close, which led to a lot of after market buying, which led to a gap up this morning with follow through.

From the close yesterday @ $9.30 to a high of approximately $12.00 this afternoon, thats a possible gain of $2.70 per share.

If I had a $2,000 position (222 shares) and only caught $.50 of that move that would be $111 gain. The idea is to just capture the meat of the move over and over again, compounding your account along the way.

Seems simple enough, but there are lots of variables that one needs to pay attention to.

Tim's rules state that you should buy earnings winners the day of or the next day ideally, however sometimes it can take up to a week before the market digests this information and catches on, propelling the stock higher. What matters above all, is how the stock reacts to the news, not necessarily what the actual numbers are. Perception in the marketplace is everything.

As this chart shows, it broke above a key resistance level and held, so tomorrow could be a follow through day with the next point of resistance being the $13.00 mark.

Anyways, just thought that was cool so I'd share it.

I watched the movie Don Jon the other night and to be honest I can relate to that movie on many levels. It is quite funny, but pretty insightful and nostalgic for me :)


NEXT DAY:

Well bummer. Immediately down after the open today, but support is holding near the $11 mark. If the high can be broken perhaps some follow through can be seen, but looking at the past I don't see anything to provide me with real conviction on that. This is why it is so important to be there for the actual market action. You have to trade the moment as it happens. I guess we'll see monday what comes of PEIX. If that support breaks it looks like $9.30 is the lowest target.. that would be a nice gain on a short position. Have a great weekend!