Here is a Powerful Way to Trade News
Today’s
PowerRatings article will focus on Rule #10 of TradingMarkets 10 Rules For
Trading. Rule #10 says:
Trade news…but not
like everyone else.
Watch the way the
market or a stock reacts to the news. Stocks which are above their 200-day
moving average
that go up on bad news are likely going higher. Stocks which are below the
200-day and drop on good news are likely heading lower. The rule is if they
can’t go up on good news they’re likely heading lower. And if they don’t go down
on bad news there is a very good chance they’re going higher.
One of the most important factors that drive stock prices is
earnings, so we should track how they react to earnings. Each day we
publish 2 crucial lists:
1.
Stock that Dropped on Better Than Expected Earnings–
These are stocks that
announced better-than-expected earnings and dropped on the day. Such market
action may indicate a fundamental change in the outlook for the stock.
2.
Stocks that Rose on Worse Than Expected Earnings–
These are stocks that announced worse-than-expected earnings and rose on the
day. This market action may mark a change of direction for the stock.
Here are today’s scan results:
These stocks should be kept on watchlists and monitored for
favorable changes in PowerRatings and price action.
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Darren Wong
Associate Editor
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Reminder: We are in no way recommending the purchase or short sale of these
stocks. This article is intended for education purposes only. Trading should be based on your own understanding of market conditions,
price patterns and risk; our information is designed to contribute to your
understanding.