There definitely is a pattern going on. Big tech stocks delivering good earning and pushing the market up along the way. It feels good out there, especially for those co's that have delivered optimistic news, earnings related or not. This is good news for everyone. When market is in a good mood, it's just much much easier to deal with everything else. We don't necessarily have to trade THE stock in news such as AMZN or AAPL, but we can take the advantage of the rosiness of this market to tackle other stocks that we are familiar with and in our niche. There have been tons of small caps releasing earning these days and with the help of the generosity of this market, we can sure capitalize on some good stuff out there.
First of all, you have to make money on a day like today. What we said this morning was vital to tackle today. If you aren't, then there's something wrong with your holdings/strategy. What's a cure? Dump the laggards and get into the winners. Yes, it's that easy. For us, we only fall in love with a stocks action, never the stock itself. So if a stocks action gives us headache, we cut it and move on.
Earnings play! We have stressed enough times that a pre earning run is merely a PRE earning run. Holding through the earning defeats the purpose of playing the pre-earning run. This is not a complicated concept but a much useful discipline for DJIM traders. We don't hold into earnings, period. We just play earnings. There are quite a few earnings related plays today so we'll go over some of them...This morning we gave our strategy to a few names we'd closely monitor for a potential play...
DXPE, earning came out last night and stocks action delivered today. What may cause this is the possible fact that the stock did NOT have a typical pre-earning run-up prior to the announcement. It just had a fews days sandwiched between a so-so day. The stock price pretty much sat in a flat line since the last earning report and this time it just jumped much like last time. Like we said before, seasonality factor favours DXPE, BTJ kind of stocks going into the summer. The action today only further confirms our thesis and we bot some during today's run-up. Our approach was to watch tape, the market reaction after the bell and "go from there". Soon, it was clear the crowd, the market wanted a piece of DXPE.
RVBD, "We will play accordingly if we see it has potential to smash that level or if it does". Well as it happened, low $33 area was attacked and we entered into this play. We are not chartists, but one look at the chart today showed and area of tops from Dec to March. Our 'charts for dummies', handbook said if it takes this level, we'd like to play it. The factor of a hot tech market made RVBD an easy choice today.
BTJ, much like DXPE, this one did very well off the earning. Mood is very positive for this sector and we have no reason to doubt that this one can run much further. Float is small with this one and it doesn't look like it'll give up its spot on IBD100 list anytime soon.
What did these 3 have that SILC didn't?. A mixture of sequential growth and good guidance, something SILC didn't. If reading numbers isn't your game, let the market make the deciding factor for you before you enter a trade. Simply..you want to be where there is a influx of money going in..not going out. The easiest way to do so is WAIT!. Also, it is not just about reading the headline numbers. If that was the case we'd all be buying EML today!
SCHN, oh how we like this steel earning addition to DJIM. Closed up another 6% higher. This is up from $45 when first intro to a high of $53.50ish today.
IDSA, this is and old friend for us that came out with results mid day. The stock caught on fire b/c of the recent surge in scrap metal stocks and whole sector in general. What got us more intriguing is the fact that IDSA's IBD number 90 90, prior to the report, is good enough to get on the IBD100 list. Be caution though, this one is volatile and can turn on a dime. We do, like the risk/reward of this one at this point given the rosiness of the sector, the market in general and the potential IBD fever attached to it.
PAE, this one was profiled in briefing yesterday but we mentioned it 8 trading days ago b/c of its earning, plus a recent alert on a move on $2. All we can say it is a beautiful thing to sell our stocks into briefing profiles that get new bait for our already discovered fish!. This one has gone up nearly 50% ( 1.70 to 2.50 close today) since our Journal on it but you'd hardly notice it b/c of its cheap price and with what's going on with all the other action. " Usually a stock turning the corner on profitability gets some attention sooner than later. It actually got into IBD's top earning announcements column and might get a look Monday or simply crawl slowly upwards from here. It can be a complete bore or its numbers and float and price will get some cash into.." DJIM
MTOX ROS keep on ticking best. Some others we were trading today in smaller sizes and/or closely watching, MFW RCCC CYNO BW(eps in am).