Pre-earnings volume trade refers to the trading activity that occurs BEFORE a company releases earnings.
A company reports earnings four times a year (one for each quarter). The trading activity leading up to earnings provides clues about potential price movement.
Here are 4 key factors to look for before you make a trade ahead of an earnings report.
Unusual volume patterns: Traders look for spikes in trading volume without any apparent news, which may indicate that investors are positioning themselves ahead of earnings
Market sentiment: Higher volume often reflects increased interest, speculation, or insider knowledge about the company's expected performance
Volatility expectations: Pre-earnings periods are often volatile as traders speculate about whether the company will beat, meet or miss earnings expectations
Options activity: Many traders also analyze options volume and open interest, as these markets often provide insight into how investors expect a stock to move.
Bullish vs. Bearish Signals
When it comes to identifying a potential move up or down, higher volume with rising prices may suggest optimism about positive earnings.
On the flip side, higher volume with falling prices may imply pessimism about poor earnings performance.
The beauty of a pre-earnings volume trade is you don't need to guess if a stock is going to go up or down. You can make money either way - as long as there's a big move.
How My "Pre-Earnings Volume Scanner" Identifies the Best Possible Trading Candidates
Let's look at how my new "Pre-Earnings Volume" scanner works to identify the candidates for you (with visuals).
First, each day you'll see a table that shows you the candidates for a Pre-Earnings Volume Trade.
I've attached a screenshot below.
On the far left, you'll see the stock symbols (ADBE and CIEN in this case).
These are the companies the scanner is picking up.
Also, notice the red circle above. This is the daily volume vs. the 30-day volume column.
For a company to be a strong candidate, I'm looking for the volume on the day before earnings to come out at least 100% or more of the 30-day average.
The higher the percentage - especially above 100% - the better shot it has at being a pre-earnings volume trade winner.
And in CIEN's case, it has a trading volume well above 100%. That's enticing.
Another convenient feature of the scanner is the company stock chart, which shows up when you click on the symbol.
I attached a zoomed out picture so you can see what it all looks like below. So everything is in one place.
Ok, so now we've identified more than 100% trading volume on CIEN.
But that's not all...
The Importance of the 9-Day EMA
One other crucial factor is the 9-day EMA. This 9-day EMA is an important part of the checklist that gives us the very best, highest quality candidate.
As you'll see above, the stocks touching the 9-day EMA will have a checkmark, and CIEN has the 9-day EMA box ticked.
This signifies indecision between the bears and the bulls. With heightened stock volume and bull/bear indecision before earnings, you have the potential for outsized moves when earnings news hits (good or bad).
And that's it - once you see those two factors (100%+ volume and a checked 9-day EMA), then you have a strong pre-earnings volume trade candidate.
How to Execute a Pre-Earnings Volume Trade
Once you identify your pre-earnings volume trade candidate, you'll want to know how to execute the actual trade.
This scanner gives you multiple trade ideas for each pre-earnings candidate. It also shows you what you need to break even on the trade based on the strategy.
Keep in mind - these are NOT trade recommendations from me. I only give specific trade recommendations in The War Room. However, this scanner gives you a couple of different ideas for the contracts you could use if you wanted to make a trade on these candidates.
Overall, the Pre-Earnings Volume scanner is one of my most powerful ways to land potential triple-digit gains in less than 24 hours.
YOUR ACTION PLAN
This is just a small taste of the scanner's capabilities. In the video below, I go over hundreds of examples of pre-earnings trading winners - many of them for triple-digit gains.
In fact - these plays target gains as high as 360% or more on earnings day.
You'll also get to see how the scanner works with my full demo video.
You are receiving this email because you subscribed to Trade of the Day. To unsubscribe from Trade of the Day, click here.
Questions? Check out our FAQs. Trying to reach us? Contact us here. Please do not reply to this email as it goes to an unmonitored inbox. Forgot your password?Click here to reset it.
To cancel by mail or for any other subscription issues, write us at: Trade of the Day | 14 West Mount Vernon Place | Baltimore, MD 21201
North America: 1.800.507.1399 | International: +1.443.353.4977 Website | Privacy Policy
Nothing published by Monument Traders Alliance should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed personalized investment advice. We allow the editors of our publications to recommend securities that they own themselves. However, our policy prohibits editors from exiting a personal trade while the recommendation to subscribers is open. In no circumstance may an editor sell a security before subscribers have a fair opportunity to exit. The length of time an editor must wait after subscribers have been advised to exit a play depends on the type of publication. All other employees and agents must wait 24 hours after publication before trading on a recommendation.
Any investments recommended by Monument Traders Alliance should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.
Protected by copyright laws of the United States and international treaties. The information found on this website may only be used pursuant to the membership or subscription agreement and any reproduction, copying or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Monument Traders Alliance, LLC, 14 West Mount Vernon Place, Baltimore, MD 21201.
