question on buying a GAP UP

W

Warrior4g

if company XYZ reports bowout earnings and guidence.how many of you buy the opening gap up in a stock? what are some of your strategies regarding such a scenario?
 
I suggest trying to bid for 1/4 to 1/2 position about 5 mins prior to open, then adding to the position on new highs at the open. That way you have a better average and can hold through any little swings. That would get you in stuff like ZMH and FTO today for a nice ride.

I don't currently trade this but had some success with it last year.
 
Quote from hoodooman:

84% SUCCESS RATE GOING SHORT WITH THE RIGHT INDICATORS.
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wouldn't 84% success rate apply to wrong indicators or no indicators as well?
 
Quote from enforcer99:

if company XYZ reports bowout earnings and guidence.how many of you buy the opening gap up in a stock? what are some of your strategies regarding such a scenario?
More...

There are 3 basic "gap plays".... gap-n-go, gap-n-crap, and gap-fill-resume... a couple variations of each.

Sometimes you can make a better guess as to which it likely is. The rest of the time you need to figure it out as it develops.

I find "indicators" to be of little value.
 
I don't like to go long a gap up on an earnings stock, but I do like stocks that gap above the previous days highs and find support there.

You may be better off trading a stock in the same sector and using the earnings stock as a leader (if earnings stock is up 5%, and related stock is flat to up 1%, buy the related stock, especially if the related stock has not yet reported).
 
Quote from Deebee230:

I don't like to go long a gap up on an earnings stock, but I do like stocks that gap above the previous days highs and find support there.

You may be better off trading a stock in the same sector and using the earnings stock as a leader (if earnings stock is up 5%, and related stock is flat to up 1%, buy the related stock, especially if the related stock has not yet reported).
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actually when stock 1) gaps up 2) forms a base and than 3) breaks out from the base (basic plan to print money).
 
Quote from hoodooman:

84% SUCCESS RATE GOING SHORT WITH THE RIGHT INDICATORS.
More...

I agree. remember "buy on rumor, sell on news."

However we don't trade stocks on earnings day, way too risky. "Blow out earnings" - stock down 3 %, etc. Happens all the time.



FWIW,

Don
 
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