Friday, 3 May 2013

A cruel reminder not to hold a stock through Earnings - Genting

Dear Friends,

Today we face a cruel reminder of not to hold a stock through earnings. In the past, I have advised short term traders to liquidate all positions before earnings. This is especially so for Genting today. After powering forward for the last few days from $1.40 to $1.64 highest yesterday, today it gaps down to close at $1.485 after a poor poor earnings results.

http://www.shareinvestor.com/news/news.html?source=dj&nid=20130502DN004653

This is the power of earnings. It has the ability of causing a stock to lose 10% of its value in a single day. After 10 years of trading in the US market, I have a phobia of holding a stock through earnings as it seems too unpredictable whether a stock will gap up or down. It is like holding a time bomb to me.

I would encourage all short term investors to adopt the habit of liquidating your positions going into earnings. However, if you are a long term investor, a 10% drop is still ok, as it may still come back and may even be a good opportunity to add on position if you think it is worth it. It is important to know your trading style.

Rgds
Daniel
www.danielloh.com

STI is the Only Flower stuck in a pile of Cow Dung! - The only major index in Asia that is in the Green

Dear Friends, A few days ago, I issued a post on where I think is the accumulation area of STI - 3300-3350. Yesterday it dropped into thi...