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Lesson #5 - The TSM Earnings Play
I want to tell you about a trading strategy that I
use for TSM stocks during earnings season. Specifically, I'm looking for
TSM stocks that have just reported earnings either the night before or
the morning before today's open. Further, I'm looking for the TSM
stock that reacted badly to the report by diving at the open.
Simply put, I'm going to identify likely areas of
support (major moving averages, areas of prior highs or lows and
possibly major Fibonacci levels). Before the open, maybe the night
before, I'll place a buy order at or just above the support and then
hope to catch the fall.
Well KORS was just such a play, strong
fundamentals, particularly low PEG ratios. It dove at the open
over the first 15 minutes, ran through my buy price, then rebounded.
In a three hour period, KORS had rebounded by $4.5.
Keys:
Every Sunday, I put together a list of TSM stocks that will
report during the week, along with their fundamentals. Further, I list
the winners with explanation on the main TSM page.
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