Patience, Grasshopper
One of the most important things to keep in mind when analyzing news in
relation to trading is that the reaction to the news is what is important, more
so than the news itself. A good example comes from this morning’s pre-market
postings in TradersWire.
09:06:05
Stocks Wall Street is Watching
Applied Materials (AMAT),
up 0.16% at 44.78, released better-than-expected earnings after the bell
yesterday with a loss of 6 cents a share, compared to an anticipated 8 cents a
share.
Earnings news are always tricky plays, but remembering to play the reaction
is the key, rather than jumping to conclusions and guessing.
Â
Aggressive traders may want to get in when the stock trades
above the prior high and the market is showing early strength. However, even
more patient folk can grab some profit when AMAT moves out of an ascending
triangle/triple top for nearly a 2 point gain.
Remember to wait for the reaction to news, then make your move.
Don’t gamble on what may or may not happen.
Until tomorrow,