EarningsBeats.com Digest for August 30, 2019
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It's Always Risky Holding Stocks into Earnings
Reports
In Wednesday's EB Digest Tom Bowley showed a chart on Okta, Inc.(OKTA) a company that was scheduled to report its earnings after the bell that night. Based upon the chart and Relative Strength Tom predicted the stock would beat earnings expectations, which is exactly what happened. Not only that, OKTA guided higher for the next quarter. So that nice 1-2 combo took the stock higher, right? Not exactly. In fact, by the time the market closed on Thursday the stock had dropped 4.5%.
How is that even possible? Well, as you can see from the chart above the stock had been on a tear, up over 90% since early March, so expectations could have been even higher than the Street expected. Whatever the case it illustrate that holding an individual stock into its earnings report is risky at best. And while it's always great to ride a stock higher if it gaps up after reporting earnings its equally painful when one goes against you. Fortunately for those who may have held OKTA into
its report it recovered nicely after falling 9% earlier in the session and after holding key price support. So now we'll see if it picks up right where it left off before the numbers hit the wire.
John Hopkins,
EarningsBeats.com
Better Timing. Better Trades.
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