Learn To ‘Read Between The Lines’ On Earnings Reports

Let’s Examine This Call

I’ve had the pleasure of writing the Nightly Daytrader’s Report for
just over a week now, while Kamada has been out of town. It’s been a lot of fun.
Fortunately for all of us, he’ll be back on Tuesday. Anyway, I want to
point out a “good call” I made last night–not for adulation, but for the
purposes of education. Here is Thursday night’s

Nightly Daytrader’s Report.
Pay particular attention to TiVo. Let’s go
through how I came up with this one: The company reported earnings after the
bell on Thursday night–and they also guided lower. Now I know that people get
excited when a company beats earnings, and in this case TiVo beat by 0.10, which
isn’t bad. I also know that a lot of investors/traders don’t bother to take the
guidance into consideration, and in this case, TiVo guided lower. Also, I know a
lot of traders like low-priced stocks and jump all over them on “good news.” All
I did was put this information together and came up with a possible scenario.
Let’s see what happened:


This is a five-minute chart of TiVo for Friday. Looks like the stock followed
the game plan fairly well. The stock opened at an all-time high and was pretty
much done for the day. So where’s the entry on this one? Here’s the thing: the
stock gapped up 11%, which you know automatically makes the upside somewhat
suspect (yes, it could go higher, but usually not before some kind of pullback).
If you bought into the scenario I presented, you could have tried to get short
right away. I really had no clue where this stock would end the day, but I made
an educated guess as to what might happen on the open.

The purpose of this entire exercise is to get you to ‘read between the lines’ on
these earnings reports. A good trader will look at the beat or miss, a better
trader will know that the guidance is what really matters, and a great trader
with a lot of screen time will have a pretty good idea what the other traders
are going to do with the information and trade accordingly. (No, I am not
putting myself into the ‘great trader’ category–I didn’t take the trade myself;
plus, if you look at the other picks in that report linked above, you’ll see
that they don’t all work out). So, the next time you see an earnings report,
analyze it just a little more closely and try and ‘read between the lines.’

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The New, Improved
TradersWire


If you haven’t been in TradersWire for a while, swing
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including precise buy and sell alerts on stocks and E-minis and Mini-sized Dow
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good traders in the chat room. I’m not ashamed to say that I’ve learned a lot
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learn something, too. class=570020715-06012005> So
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Big Cap Earnings
Announcements for the Week of

May
30th











































color=#ffffff size=2 Helvetica>Companycolor=#ffffff size=2 Helvetica>Symbolcolor=#ffffff size=2>Date
Frontline ltdFROTuesday, May
31
Hovanian EnterprisesHOVcolor=#000000 size=2 Helvetica>Tuesday, May 31
Ryanair HoldingsRYAAYcolor=#000000 size=2 Helvetica>Tuesday, May 31
Comverse TechnologyCMVTWednesday, Jun
1
Engineered Support
Systems
EASIcolor=#000000 size=2 Helvetica>Wednesday, Jun 1
Joy GlobalJOYGcolor=#000000 size=2 Helvetica>Wednesday, Jun 1
SkillSoftSKILcolor=#000000 size=2 Helvetica>Wednesday, Jun 1
Kellwood CompanyKWDThursday, Jun
2
Smithfield FoodsSFDFriday, Jun
3




Scheduled Stock
Splits for the Week of
May
30th









































































































size=2>Companysize=2>Symbolsize=2>Ratiosize=2>Payablesize=2>Ex-Date
Precision DrillingPDS2-1May 31Jun 1
FNB Financial ServicesFNBF5-4May
31
Jun 1
WellpointWLP2-1May 31Jun 1
Delta ApparelDLA2-1May 31Jun 1
Gildan ActivewearGIL2-1May 31Jun 1
Greene County BancorpGCBC2-1May 31Jun 1
ConocoPhillipsCOP2-1Jun 1Jun 2
RespironicsRESP2-1Jun
1
Jun 2
Sterling FinancialSLFI5-4Jun
1
Jun 2
EnergenEGN2-1Jun
1
Jun 2
PennichuckPNNW4-3Jun
1
Jun 2
BeBe StoresBEBE3-2Jun 3Jun 6
NStarNST2-1Jun
3
Jun 6
Amerstar CasinosASCA2-1Jun 3Jun 6
Murphy OilMUR2-1Jun
3
Jun 6
SW EnergySWN2-1Jun
3
Jun 6
color=#000000 size=2 Helvetica>

color=#0000FF size=2>

color=#0000FF size=2>
Upcoming Economic Events for the Week of
color=#000000 size=2 Helvetica>
May 30th
color=#000000 size=2 Helvetica>


color=#000000 size=2 Helvetica>









size=2>Datesize=2>ETsize=2>Releasesize=2>Forsize=2>Consensussize=2>Prior

cellSpacing=0 cellPadding=2 width=564 bgColor=#ffffff border=1
xmlns:user=”urn:www.briefing.com” xmlns:msxsl=”urn:schemas-microsoft-com:xslt”>



































































































May
31
face=Arial color=#000000 size=2 Helvetica>10:00 am
Chicago
PMI

May

62.0
height=1>65.6
face=Arial color=#000000 size=2 Helvetica>May 31face=Arial color=#000000 size=2 Helvetica>10:00 am
Consumer
Confidence
size=2>May
96.0
height=14>97.7
size=2>Jun 1face=Arial color=#000000 size=2 Helvetica>12:00 pm
Auto
Sales

May

5.7M
height=19>5.5M
face=Arial color=#000000 size=2 Helvetica>Jun 1size=2>12:00 pm
Truck
Sales

May

7.8M
height=1>8.0M
face=Arial color=#000000 size=2 Helvetica>Jun 1face=Arial color=#000000 size=2 Helvetica>10:00 amheight=19>Construction Spending
Apr

0.7%
height=19>0.5%
face=Arial color=#000000 size=2 Helvetica>Jun 1face=Arial color=#000000 size=2 Helvetica>10:00 am
ISM
Index
size=2>May
52.2
height=1>53.3
size=2>Jun 2size=2>8:30 Helvetica>amheight=19>Productivity (Revised)
Q1

3.0%
height=19>2.6%
face=Arial color=#000000 size=2 Helvetica>Jun 2size=2>8:30 am
Initial
Jobless Claims

05/28

NA
height=19>323K
face=Arial color=#000000 size=2 Helvetica>Jun 2face=Arial color=#000000 size=2 Helvetica>10:00 am
Factory
Orders

Apr

0.7%
height=19>0.1%
face=Arial color=#000000 size=2 Helvetica>Jun 3face=Arial color=#000000 size=2 Helvetica>8:30 am
Unemployment
Rate

May

5.2%
height=1>5.2%
face=Arial color=#000000 size=2 Helvetica>Jun 3face=Arial color=#000000 size=2 Helvetica>8:30 am
Hourly
Earnings

May

0.2%
height=19>0.3%
face=Arial color=#000000 size=2 Helvetica>Jun 3face=Arial color=#000000 size=2 Helvetica>8:30 am
Average
Workweek

May

33.8
height=19>33.9
face=Arial color=#000000 size=2 Helvetica>Jun 37face=Arial color=#000000 size=2 Helvetica>8:30 am
Nonfarm
Payrolls

May

180K
height=19>274K
face=Arial color=#000000 size=2 Helvetica>Jun 3face=Arial color=#000000 size=2 Helvetica>10:00 am
ISM
Services

May

60.5
height=1>61.7


Have a great
long weekend!


Brice