It’s that time again, earnings season is underway. Tomorrow morning, financial giant, J.P. Morgan Chase & Co (JPM), will report earnings before the opening bell. Usually during the first week of earnings season we will see a lot of the large bank stocks report their earnings. Other large financial stocks that are scheduled to report earnings this week include Wells Fargo (WFC), Citigroup (C), Goldman Sachs (GS, Bank of America (BAC), Morgan Stanley (MS) and several others.
Often, when earnings season comes around traders must take note of the earnings dates of the stocks that they hold. It is always very important to understand that holding a stock into the earnings announcement is very risky. Sometimes you will be rewarded, but there will be times when you will be hurt by holding a stock into the earnings announcement. Basically, when you hold stocks into an earnings announcement it becomes a gamble. I personally do not hold stocks into earnings as I do not find it worthwhile to do so. Believe it or note, when I take a trade I believe I have the odds in my favor to make money on every trade. When it comes to earnings, I simply believe it is often a coin toss on the direction of the stock. So, I simply prefer to exit the trade and wait for the pattern to reset itself. Again, if you like to gamble, then holding stocks into earnings might be for you, but it is not for me.
There are always trading opportunities after an earnings report. Sometimes stocks will react really well after an earning announcement, sometimes they will not. Personally, I do not even listen to the announcement or report, I will simply just look at the reaction in the stock price. The reaction is really all that matters when it comes to trading. Perhaps, if you are a long term investor then you might want to hear what the company has to say, but I really just care about what the chart is telling me. So get ready, the earnings fun begins tomorrow.
Check out all of his documented trades, see all of his guidance, get the trades, watch the latest analysis videos and join this live event Thursday night… click here to step inside!