This works for Companys that have good earning to. I do use this method.
I look for stocks with good earnings and go through the up grades to find god stocks.
And then look for a good sector Or what they do Or what they make, Do some research on the company.
Look at the chart to find the floor to make an entry buy. Then look for the ceiling to see how high the stock can go I do trade in and out of a stock.
How to Play Upgrades
Some years ago CNBC did a survey to see how upgrades affected stock price. Their finding: An upgrade by a major firm tended to move the price of a stock 3-5% percent higher in a fairly short period of time.
So upgrades can be good short-term trades. But they are sneaky animals that can bite unless you do it right. One of the big mistakes that traders make in an upgrade stock is choosing the wrong time to buy.
If a decent company gets an upgrade from a major player, that stock will probably "gap up” that morning. Then the masses of people who get that news a little after the open pile in, and the stock runs. The true day traders jump in and out during the day and make impressive profits while the stock continues up. By late in the day the stock could be up several points.
The action the next day is up to the short term players. Generally you only get an upgrade on a good company. That means a lot of people have bought the stock expecting to see it rise, and when they see that stock rocket for 1-1/2 or 2 points they sometimes can't resist the urge to capitalize on those profits. The next day their orders are already in to sell at the open, and the stock can pull back just as far as it gained the day of the upgrade. If the initial run up wasn't too dramatic, they sometimes hold for another day hoping for more profits, and then sell it when it’s up the second day.
Either way, there is usually a pullback, and that's the real time to enter the stock if you are using a conventional brokerage. Time and time again, as evidenced by CNBC's survey, the stock will start back up and over the course of about a week or so will be up that 3-5%.
So the key to playing an upgrade is:
1) Make sure it is from a major firm ( Prudential, Goldman Sachs, etc.). 2) If you have an instant-executions system and NASDAQ Level 2, have a great day as the stock runs up. 3) If you are using a telephone broker or a regular online broker, be very cautious but get in at around 10:30 a.m., and only if the stock is at its high of the day. Plan to be out of the stock by 3 p.m. 4) If you missed the announcement day, jot down the company and wait for it to pull back. 5) Enter the stock after it finishes its pullback and has posted one good day to the upside.
If the stock is in a hot sector, it generally won't pull back until the sector cools off. When you get an upgrade on one of those stocks, you can attempt getting in at almost any time. Just watch closely so that the sector doesn't turn south on you.
Finally, make sure you don't get trapped in some "fly by night" company just because an analyst says it "should" be trading higher. It pays off to use the upgrade tactic only on established companies.
Some times stocks trade down going into earnings and Nothing is wrong at all.
It depends on the market other stocks in the sector how they are acting. Just some people do not like to hold going into earnings.
Then people start taking prophets and getting scared the stock continues to go down till it finds a floor and stops. Buyer’s start getting in the stock starts to stabilize and go up a little or finds a trading range
To me I think that SQM will have great earnings (JMO)
But I would sell some stock into the run
I do not own any of SQM & I'm not short
I'm here following the stock that is all. And enjoy reading the posts