Earnings season is just getting started, and things have started to heat up…
Tesla (NASDAQ: TSLA) and Alphabet (NASDAQ: GOOGL), both released earnings after the bell last night.
And there are plenty more releases from big names to come in the next few days and weeks.
As day traders and swing traders, we love earnings season…
Guess what else we love?
Powerful penny stock trades that bring huge % gains…
If you don’t already know about my Monday Setup, listen up!
Every Monday, the market kicks back into gear after a weekend of rest… And that reset creates a unique opportunity!
Right at 9:30 am Eastern, as the opening bell rings, we look for a very specific setup that often shows up like clockwork.
And it has delivered some incredible wins!
Take this past Monday, the 21st…
ProMIS Neurosciences (NASDAQ: PMN) gained a massive 264%* after the company announced that its Alzheimer’s drug candidate had been granted Fast Track status by the FDA.
These are the kinds of morning spikes we hunt for every Monday!
Want to learn how to spot them for yourself?
Watch the video below for the full trade breakdown and strategy tutorial.
Earnings season is an exciting time to trade.
But there’s a lot more to it than chasing headlines.
If you’re going to trade stocks with earnings catalysts, you need to know what really matters…
Table of Contents
The Real Meaning of an “Earnings Winner”
First, understand this: when traders like me talk about an “earnings winner,” we don’t necessarily mean the company is profitable.
It’s not about the financials being great.
It’s about the reaction and how the stock is moving in response to the news.
You’ve probably heard the phrase, “Buy the rumor, sell the news.” That applies here.
That’s why earnings reports can confuse new traders. A company can post record profits… and the stock still tanks.
Why? Because the market expected more.
Case in point: TSLA missed expectations last night and the stock reacted accordingly…
Source: Business Insider
TSLA Intraday, One-Minute Candles Chart; SteadyTrade
This is why we focus on stocks that are moving big on the news, not just those with good earnings.
That’s what we call an earnings winner, not based on the income statement, but based on price action.
Here’s Where It Gets Interesting…
Sometimes, a company posts terrible numbers like declining revenues or a huge profit loss…
And the stock rips!
Why? Because the market expected even worse.
If analysts thought a company would lose $1 billion, but it only lost $200 million, that’s a bullish surprise — even though they still lost money.
It’s all about expectation vs. reality, and how the market reacts.
How I Screen for Earnings Movers
During earnings season, which happens four times a year, I’m scanning for:
- Stocks with a fresh earnings report
- Pre-market volume over 50,000 shares
- Up 5% or more on the day
From there, I narrow it down to names under $20, where we often see more volatility and faster price moves.
Once I have that list, I let the price movement tell me everything I need to know.
Can you run a scan like this on your trading platform?
If you can’t, I have good news…
StocksToTrade can run all these and many more.
And the best part of all is that you don’t have to build a thing.
One of the biggest time-savers inside StocksToTrade is the built-in scans… There are more than 40 of them!
The STT platform also features real-time data, charting, technical indicators, alerts…the list goes on and on.
It has everything you need to stay ahead of the game, all in one place.
Get two weeks of both the STT platform and our Breaking News Chat service for $17.
Grab your 14-day StocksToTrade + Breaking News Chat trial today for only $17.
My Final Thoughts…
Don’t obsess over the earnings report…
The chart already reflects the market’s interpretation.
If the stock is up big with volume, the market has decided it’s a winner.
Trying to outthink the market by digging into the fundamentals might just lead you to a bad trade.
You might say, “But sales are up, revenue is up so it has to go higher!”
Nope.
Only price pays.
The news doesn’t matter if the stock price says otherwise.
So here’s your earnings game plan:
- Look for stocks gapping up with volume after an earnings report
- Don’t fall in love with the numbers
- Focus on price reaction, not press release spin
- Use tools like StocksToTrade to quickly find and filter these setups
Trade the stocks that are moving. Follow the volume. And let the chart do the talking.
Have a great day, everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade
P.S.
Do you know when your trade has maxed out?
These are my top daily stock screens.
Know when a stock is moving on momentum or actual news.