Stock Ideas 
Market Watch A Look On the Bright Side
Market Watch A Look On the Bright Side 
Market Watch
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Natural gas broke out of an inverse head-and-shoulders pattern early this year. After some consolidation, it is breaking out again, and targeting its old highs. People have been asking me if it’s too late to buy oil. Heck no, not if you think oil is going to $140 or $150 per barrel this year -- and I do. |
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| A Look On the Bright Side |
| Thursday, 27 September 2007 | ||||||||
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Dear Reader, Last week, I took a look at the unsavory side of trading earnings in recounting our Amazon.com trade experience. To sum it up, we bought puts ahead of earnings and the stock went up 27 percent in one day. Ouch. Why did I point out a losing trade? As I put it simply last week, they happen. If you believe otherwise, you shouldn’t be trading anything beyond a money market fund. The best traders in the world have losing trades. They just find a way to manage around them. How he or she manages their losses is what makes traders unique. In our case, we rely on our ability to have more winning trades than losers. This is easier said than done, of course, especially when operating in a short-term trading environment. We have found through testing and experience that our Behavioral Valuation approach can achieve this goal by finding opportunities where the risk/reward ratio favors our trades.In fact, this benefit translated to a 177-percent gain on our recommended option position in less than a month. Not too bad.
Headed into QCOM’s earnings announcement, we noted that the company was consistently beating earnings estimates, usually by a penny or two. Of the last 33 earnings announcements, the company had beaten expectations 14 times, met nine, and fell short 10 times. But for those who are in tune with the true expectations ahead of earnings, it’s a great opportunity to profit. That’s our job for our IDE Earnings Alert subscribers. We have a number of tools and filters that monitor sentiment for stocks scheduled to report. And it’s knowing when the sentiment doesn’t line up with the fundamentals and technicals that provides the ultimate edge. So keep an eye on sentiment. Get your indicators ready to go. Put on your seat belt. Earnings season is less than two weeks away. All the best with your trading. CJ P.S. To let me know what you thought of today's article, send an e-mail to: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it Source Excerpted from Investors Daily Edge
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