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Has anybody noticed that when certain stocks pre-announce that earnings are
going to be light that they will initially trade down than rip to the upside?
Recently MCHP announced bad news and was up 5 points, PRIA was up 2 points,
and another ORCTF (which I shorted and got hurt in) was up 3 points. When I
went back and looked at why I shorted the stock (ORCTF) I realized a
fundamental mistake that I made - I shorted a news reversal, something I will
not soon do again. A useful bit of information that I can share about this
experience is that if you are not comfortable buying the reversal, getting off
a short near the close seems to be a good idea. With PRIA and ORCTF (I didn't
follow MCHP) shorting the stock at the close would have paid off. (Two days
for PRIA and next day for ORCTF).
Rich Z.
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