“good news”
Posted by scmfinance on January 17, 2007
good news is great for traders, right? well, in my experience…not exactly. if you’re investing in a company, then you want all the good news you can get — afterall, you’re investing in the company’s future and good news usually means you’re moving towards a bright future. but if you’re merely passing through a stock as i like to say (a.k.a. trading), then good news doesn’t usually bring any promises. the truth is good news could move a running stock higher, boost a stock that is stalling or trading sideways, or cause a stock’s pps to drop. you retort, “good news causing the pps to drop! are you crazy?” however, i’m sure you’ve heard the saying, “buy on rumor, sell on news,” right?
take for example the stock i am currently losing my shirt in, which i thought was having a nice run, broke and closed above a down trend line, and looked like it was going to keep running…the next morning, great news came out and the pps dropped. oops! i must have got caught in a “buy on rumor, sell on news” play. and trust me, it hurts. i’m sitting here telling myself, “wow, i hope they issue another press release with good news to get this kick-started again.” and that’s when you know i’m in a sticky situation – i can’t help but ignore my own advice!
so, if you’re an investor, than of course good news is great, but for those of us continually passing through various stocks, don’t find yourself waiting on “good news”…you may very well blow right thru your next stop!
Daniel said
What stock was that?
scmfinance said
it’s quite an embarassing play, but i promise i will give a full update when i exit the play (as i’m still in it), which will hopefully be tomorrow. as of now, i am just trying to find a better exit point, although that doesn’t even seem to be working out well. full update though as soon as i exit and then you can all laugh at me
Daniel said
I wont laugh at you. Ive taken some losses too. Unless you just lose like 50%? lol
5th play — the pain that was ONGOing « @ tradR said
[...] which meant the PPS should move up, right? this is the part where you should read my post on “good news” if you haven’t already because i was dead wrong. the PPS continued to drop and i was too [...]