Wednesday, February 07, 2007

Taking My Own Advice

I do not like holding stocks through earnings unless they are rising into the occasion. In other words if they look like stocks you would want to buy regardless of the situation they are probably going to come out the other end just fine. If they don't then you better beware and be wary.

I've been holding CRVL for many days now and actually had a nice piece of profit in it last week when it started collapsing. This morning it actually fell to below my basis and I said as soon as you get me some money back you're gone and it did and it was. This stock looks ill.

And yes I still made a profit in it but I think now that I should have dumped it back at that dummy spot last week or at least the next day or even the day after that - how many memos must a stock send before you get the freakin' message? Anyway it doesn't look like it's ready for prime time. It could be just a hangover from its recent M&A activity or a lot of insider selling in front of earnings but I'm taking no chances. The action on the stock has dried up so I'll take my little profit and run. Probably be sorry after earnings come out and the stock shoots to the moon - but that will be fleeting and I will be on to something else.

CSCO is an example of a stock rising into earnings and it is up 4% today. Another one is CI - take a look -

You could have bought that stock any time in the past week and a half with confidence. And that's what I mean when I talk about rising into earnings. Does it always work - no but it does often enough to make a difference. Now the other side of the coin is this - earnings are a short lived story - 2 days later the stock generally crashes. If I remember we'll revisit both CI and CSCO at the end of the week and see how they are doing.

For earnings information I like two sites - WhisperNumber and Earnings Calendar

No comments: