What is a Mixed Earning Report?

Day Trading a Mixed Earning Report

What is a mixed earning report

What is a mixed earning report?

  • A mixed earning report is when a company announces that they beat on earning per share but missed on analysis forecast for revenue, this is still bad news and will cause traders to short the stocks when the market opens.

  • With a mixed earning report we are careful and best to watch what happens first or short the stock pre-market if the price has room to drop, about 60% of the time a short is good as traders always focus on the bad news.

  • But remember to trust your gut, if it doesn’t feel right don’t trade it.

  • Also, it’s important to look at sales forecast or guidance for the next quarter as this also is bad news if the number is down.

  • While researching stock earning reports we should also search Google for other news that may affect the stock price on the day, for example, a court case against the company or a drop in interest in a product will cause the price to drop.

  • But always look for the premarket price to give you guidance on what traders are doing on the day.

  • But overall, if you have a mixed earning report on one company, it’s best to select a company that comes out with a clear earning report, either very good or very bad, not mixed if available that day

  • We should buy a stock when the earnings per share and revenue beat analysis expectations and sales guidance is good and shows growth along with the revenue.

  • Oppositely, we should short a stock when the earning per share and revenue misses analysis expectation and sales and revenue do not show growth or guidance has dropped.

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