We will share the concept of how to take advantage of the earning season for day trading opportunities in this blog. For further details on the steps, you may follow the link at the bottom of this blog or join our upcoming webinar.

Most retail investors are afraid to trade on quarterly earnings announcements. Because they are afraid of the price falling after the announcements. Which is quite common in KLSE’s stocks move higher or gap up in the morning after the announcement, then price starts falling a day later.

Traders & investors don’t need to worry about the above anymore. We have a way to catch the price up after the announcement & exit before the big boys sell their shares lower. But this can only apply to day trading & sometimes short term trade with 1 or 2 days holding. 

We can’t go longer than 1 or 2 days because usually big boys take advantage of the positive earnings for quick profit. Unless you want to give money to the big boys, then you can take the risk & go for a longer term. But if you are thinking of holding long term, why not enter after the price goes down lower. Since we know the big boys will cause the stock price to go lower after the stock price reacts to the earnings right?

Selecting the right stocks for day trade

You can find earnings announcements on various websites from the link below : 

https://klse.i3investor.com/web/financial/quarter/latest

https://www.malaysiastock.biz/Quarterly-Report.aspx

Or you can follow the link below to find a list of companies upcoming earnings announcements. 

https://klse.i3investor.com/web/financial/quarter/upcoming

Look for those stocks that were announced today after 5pm, the big boys will pump up the next day to attract buyers. We will prioritize those with QoQ & YoY gained (at least QoQ is positive), then screen out those that are not liquid (can see from the chart with candlestick flying up & down everyday or very little transaction on a single day with a dash formed).

Now we know the big boys will take advantage of the positive earnings or surprise earnings. So we need to know which kind of stock price movement will move higher after the announcements are made. 

To avoid getting trapped in “pump-n-dump” on quarterly earnings, we have to find those stocks that haven't pumped up before the earnings announcement. Then, the stock price will only move higher in a day after the announcement is made. Stocks prices that move higher before the earnings are announced, usually attract enough retail investors’ attention. 

Retail investors will think the earnings of this stock must be positive, that’s why the price moved higher before the announcement. But they will wait for the announcement & “confirmation” of the positive earning before they decide to invest into the shares. That is when the price starts to fall, because the big boys are selling shares down to those who park at the lower price buy queue. 

Therefore, we will apply day trade in these positive earning stocks to avoid getting trapped in a “pump-n-dump” & able to catch the price up during the day before they sell it down.

Best Entry Timing, never best entry price

After knowing which stocks have positive earnings & stock prices haven’t been marked up by the big boys yet. We usually enter in the morning at the opening price, whether it is a gap up, we will still move in at the opening price. When there’s a great opportunity appearing in front of us, we seize it quickly. We don’t wait & think what is the best price or hoping the price to be lower so we can get more profit out of it. The longer you think, the bigger the difference between your expected entry price & actual market price. 

Our trading styles are very different from the rest, because we look for stocks that big boys want to mark higher. We can find stocks & entry at the right timing with our operator analysis, it helps us to analyse the big boys intention with price & volume action. Every action we do is reacting to the big boys, whether it is take profit, cut loss, & entry. This is why we don’t have the best entry price & projection for the take profit target. 

Even big boys don’t know how far they can markup sometimes, how can we know the target price right? This applies to all kinds of investment, it is about the best timing not the best price. Investing at the wrong timing will affect our profitability & even losses. 

Do take note of the opening price of the next day, if the gap up is too high lets say 0.03 away from yesterday closing price. That means the big boys have no intention to mark the price higher after the market opens. Because the price is high enough to get investor’s attention.

Price peak = big boys ready to sell

Big boys intention is simple, mark price up to attract investors attention & buying urge. Sell shares down to retail investors who park at the lower price. 

To know where the price peaks & taking advantage to sell at the possible high price that we can sell, we need to find out the transaction pattern of the big boys when they churn buy volume at the same price to create fear-of-missing-out to the retail investors. Let them think the buying pressure is high, but it is just the transaction done between the big boys left hand to right hand. 

You wish to understand more after our brief introduction, do visit our blog with the link below for further explanation on how to take advantage of the earning season.

https://roundnsurge.com/news/klse-trading-101-profit-opportunity-in-earnings-season

Upcoming webinar : 

Day trading opportunity during earning season

Date : 

13 NOV | SUNDAY 7:30PM

14 NOV | MONDAY 8:30PM

16 NOV | WEDNESDAY 8:30PM

Registration link : https://attendee.gotowebinar.com/rt/4689830935862642446

About Us

Malaysia's stock market is a unique market; hence it requires a customized trading approach to tackle & swerve. Many existing traders in Malaysia apply a plug-and-play strategy from the overseas stock market, but it is not necessarily the best strategy to trade in KLSE. This is due to the difference in local and overseas stock market regulation and the size of market participants of institutional funds & retail investors.

“True traders react to the market.” is the backbone of our trading method. Our findings and strategies are developed through years of trading experience and observance of the operating style in Malaysia’s stock market.

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Disclaimer :

This blog is for sharing our point of view about the market movement and stocks only. The opinions and information herein are based on available data believed to be reliable and shall not be construed as an offer, invitation or solicitation to buy or sell any securities. Round & Surge and/or its associated persons do not warrant, represent, and/or guarantee the accuracy of any opinions and information herein in any manner whatsoever. No reliance upon any parts thereof by anyone shall give rise to any claim whatsoever against Round & Surge. It is not advice or recommendation to buy or sell any financial instrument. Viewers and readers are responsible for their own trading decision. The author of this blog is not liable for any losses incurred from any investment or trading.