Friday, February 4, 2011

Playing earnings gaps in after-hours and pre-market Part 3

I just wanted to follow-up on my previous 2 posts, because a bunch of people have asked me questions about this little strategy! Well, it's not really a strategy per se, but more like a shot in the dark and see if you hit your traget! It doesn't always work out, so here's an example where I didn't get filled at my desired price. But that's ok, sometimes you get lucky, sometimes you don't! I just don't want to get filled at a higher price where the risk/reward was not as good, and then you end up chasing the stock. The important thing is to that you identify your price targets accurately, where the risk/reward ratio is heavily on your side!

So last night I watched JDSU trade in AH, and notice a nice little area of support around 20 to 20.25, so I set an order to buy some shares at ~20.11. I knew that 21.5 would be an area of resistance, so I didn't want to buy higher than 20.5, otherwise my r/r would not have been good. I never got filled unfortunately, but that's ok, because I still played JDSU after the open!

On the other hand, I did get lucky with YRCW in AH though. I had put an order to buy shares at 4.04, which was 1 penny above the low of day from 2 days ago. So I got filled this morning ~8am, and the stock rallied straight up afterwards! I scaled out along the way up, where the second arrow is, but I'm still holding some shares as I write this post.


  1. thx for putting the charts up cath, now i understand your strategy in ah. its worked multiple times now too. for probably about 30 days i have tried the same strategy but with selling in ah, with rather high limits but still within daily chart ranges, and only got filled once, so it seems your buy strategy is more viable. good stuff, thx

  2. Thanks for putting your strategy on paper for us to read. Very consistent and quite profitable when you get fills. Great work Cath!