Discussion on stocks with earning reports due

ET180 said:
I wouldn't do it. NFLX does seem euphoric and could be over-valued. But there's still probably a lot of people wishing that they were in it (don't you wish you bought yesterday before earnings). They'll pile on during any dip. So why short something that has demonstrated strength? Why not short something weak and in an downtrend like oil / energy related. I look at relative strength. When the market rallies today, I notice stocks that are not participating in the rally. Those would be good candidates to short when the market weakens. Trend is your friend.
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I'm expecting a move similar to what happened with AMZN in april. A strong rise like today then a pull back and consolidation. I'm not looking to be in for long, maybe 2 weeks at most. We'll see who is right in 2 weeks time.
 
recession2016 said:
I'm expecting a move similar to what happened with AMZN in april. A strong rise like today then a pull back and consolidation. I'm not looking to be in for long, maybe 2 weeks at most. We'll see who is right in 2 weeks time.
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Or NFLX could do what it did on Jan 20 / April 15th of this year, go flat for a while and then keep running with no retracement. Good luck with the trade. I hope it works out for you and does go down a bit. I'd eventually like to get in at a lower price.
 
I won't chase netflix. It is always regarded as overvalued because it doesn't make money (as well as Amazon). A lot of people now know it and now they are covering. When they are finished, these stocks will drop - that's when you buy.
 
ET180 said:
Does it make more sense to buy something that everyone currently wants and regrets not owning or something that everyone regrets buying thinking that they picked up the bottom and can't wait to unload as close to break even as possible? Buffet (possibly quoting someone else) said buy when everyone is fearful and sell when everyone is greedy. But is a great company with a great idea / excellent execution more likely to exemplify the first or the latter characteristic? This is basically the value vs. momentum investing / trading strategy.
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There are times when one strategy outperforms the other. So, you have the benefit of strategy diversification by employing both.

This is really off topic and I don't want you to hijack the thread. Let's stick to earnings plays.
 
hajimow said:
Maybe selling naked Put at 600 for August makes sense.
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Well, this morning GOOGL was at $690, selling $600 naked put could only nets me $0.85 so it won't do much ($600 call was $90).

For us new to the options game, this is one real life example of tail risks and "picking up pennies in front of a steamroller". Selling premium is profitable but in the long run may not beat buy and hold. The lesson for me is to avoid earning period if I want to continue writing calls even though the previous 4 earning period trades were good.
 
Sotnis said:
I won't chase netflix. It is always regarded as overvalued because it doesn't make money (as well as Amazon). A lot of people now know it and now they are covering. When they are finished, these stocks will drop - that's when you buy.
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Actually years ago maybe a year after NFLX IPO, some hedge fund managers started to short NFLX in big volumes and the short interest was very high and short squeeze made them almost bankrupt (a little exaggeration). I just watch NFLX price action as watching an action movie but I don't get involved. I have a handful of stocks that I constantly trade them. Rarely get distracted and add a stock to my list. Based on IB performance report, from 2009 till June 2015, my average ROR is 4.65% and the highest month was 86% and the lowest month was -35% on a large account (6 figure). Losing or making money does not excite me that much being right and seeing that I was right is more important to me. Sometimes my way of trading becomes very boring.
 
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Now my opinion on GOOG:
It had a great results but P/E of 30 is very high. The reason that it rallied over 16% is that too much money is chasing certain stocks. This happens at the end of a bull market. Many people think that they are left out and are losing money keeping cash and jump into bandwagon. Lets assume that GOOG has a P/E of 19 which would be very reasonable which means GOOG can drop 200 points and still be reasonably valued. I am more interested to see what happens to AAPL, FB, and some semi stocks. Somehow I believe that market correction should start from biotech stocks. We shall see.
 
i think expecting a correction at this point in time isn't the right view

nasdaq just broke out of a consolidation pattern and if earnings keep delivering, the DOW and s&p will follow the nasdaq higher
 
Basically the earning season starts like this: The company predicts the earning for next Q to be between like 600M to 620M and earning be 0.38 to 0.41 per share and then 20 analysts pick their numbers between 580M to 640M and earnings of 0.36 to 0.43 without any visibility just based on guess and the info the company provided them and then on earning day the company announces that the sales were 635M and earning was 0.43 per share and the stock goes up 20 percent !!
 
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