After the close of business today Apple, Inc. (NASDAQ:AAPL) will report its fourth quarter earnings. I thought it would be interesting to go back and look at the last three years to see how you would have done if you just used this simple trade strategy.
The premise is simple, when both the weekly and monthly Trade Triangles are in sync, i.e. when they are both in the same direction, you would take a position on the close in the direction the Trade Triangles were indicating. You would then exit this position the following day on the close.
So here's what is needed to make a trade in Apple before today's earnings report is released. The position is taken the day Apple, Inc. (NASDAQ:AAPL) releases its earnings report, i.e. today.
(1) Both the weekly and monthly Trade Triangles are in sync.
(2) Take a position on the close in the direction the Trade Triangles are indicating.
(3) Exit the position the following day on the close.
These are simple, straightforward instructions. As an old mentor of mine used to say, "They don't pay you any more for making it complicated."
Today, I'm going to investigate whether or not MarketClub's Trade Triangle technology can predict stock earnings.
To do this I randomly chose 7 stocks that just reported their Q3 earnings. Here are the rules I followed for taking or not taking a position in a stock before a company announced its earnings.
Long And Short Rules
Use the Trade Triangle technology to determine how you would have been positioned in each stock before they announced their earnings. You are looking for uniformity between the monthly and weekly Trade Triangles, i.e. a matching monthly and weekly green Trade Triangle would indicate holding a long position before an earnings announcement. Conversely, a matching monthly and weekly red Trade Triangle would indicate holding a short position before an earnings announcement.
When there is a conflict between the weekly and monthly Trade Triangles, a sideline position is in order. For example, if a monthly Trade Triangle is green and the weekly Trade Triangle is red, it would indicate a sideline position.
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Why do Bank Earnings Matter?
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