It is that time of the year where, if you are a day trader, your mouth begins to water a bit with the thoughts of all the earnings releases coming out. Good or bad, what they do ensure is that you are able to trade names that are “in play.” To me, for a ticker to be ‘in play’ means that the ticker will likely be moving more than usual and have an higher volume than normal. This has several advantages. Higher volume makes tickers less prone to manipulation as it increases the risk of those seeking to push a security in a given direction greatly, thereby reducing it somewhat for a day trader who can remain nimble. The higher average true range (due to earnings beats/misses) means that there is an opportunity to capture a significantly larger move. Finally, uncertainty about what earnings mean/guidance will often ensure tickers remain volatile throughout the day and also sometimes present second day plays on tickers.
I have been compiling a list of companies that report next week. For Monday I have the following list so far (as my favorite site for earnings is predictably down for now):
BIIB, BUCY, C, GILD, HAL, MEE, BA, NVLS, STLD, VRTX, LLY, CR, BRO, GCI, ICUI, KEY, LNCR, MTB, MMR, MOH, RLI, AMTD, TXN, TITN, VITC, GWW, ZION
I will refine this list Monday morning. I will look for stocks trading near key longer term levels in the pre-market, stocks that have established tradable levels in the pre-market, and finally those that beat/missed by the largest amounts and/or are gapping the most. After that it simply becomes a matter of watching the tape and trading what the market gives you rather than your bias on a given ticker. It is always important to remember that a stock and a company are two completely different things, especially when looking through the lens of a short term trader.