I just went through 28 stocks' charts that are reporting after-hours tomorrow looking for the tell-tale anomalies that are associated with earnings leaks. Just to be clear, there aren't usually that many stocks that exhibit signs of an earnings leak, but in the past we have found quite a few. One earnings quarter I wanted to show members how corrupt wall Street was and posted before earnings how I thought the stock would react to earnings (not whether they would beat or miss, just the reaction as we have seen this last few weeks stocks can beat and still be sold off0. I found 22 candidates and posted what I found before earnings, 19 of 22 were right, although I probably looked at several hundred stocks.
Of the 28 I looked at today, I found 10 possible candidates with 3 being higher probability ( I assigned them a rating of 1-5, 5 being highly probable) with a rating of 3, they included PCLN, AMRS and HGSI.
I'm leaning bearish on PCLN and bullish on AMRS and HGSI. However, I learned not to judge too quickly as a few quarters back we nailed GOOGLE, but it only gave a strong tell-tale sign 15 minutes before the close with earnings after the close, so I'll monitor all of the candidates tomorrow and if there seems to be a very high probability trade, then it will be posted before the close as these all report after the close.
Here are some example charts thus far...
PCLN...
There's some accumulation in this 60 min chart back in November sending PCLN higher, and another smaller zone more recently, since then it has turned negative. If you were Wall Street with inside knowledge, you'd want to sell as high as possible or short as high as possible. The 2nd accumulation zone wasn't as strong as the first, it seems it was just there to push PCLN up higher.
Near term we see the same short term support to elevate PCLN, but distribution that is stronger.
This 2 min chart puts a finer point on it as does the 1 min chart below. We'll see how it reacts tomorrow as to whether it will make for a good earnings play.
HGSI-If the basics of what I said above about selling in to strength apply, then HGSI, if there were positive earnings news leaked, would be accumulated at the lowest prices possible.
On this 60 min chart HGSI was distributed in to a head fake in yellow, a head fake is one of the easiest ways to move a stock down quickly. However on this long term chart we also see recent accumulation. Since this is a biotech, we can't assume with certainty that this is earnings related as it could be a leak from the FDA as well.
The 30 min chart shows good confirmation of the same starting with the head fake in yellow.
All of the charts are confirming like this 15 min...
A leading positive on the 5 min
And a very impressive leading positive on the 1 min. I actually like this chart a bit better then PCLN, but we will wait to see what changes may occur tomorrow, as I mentioned, we nailed GOOG, but not until 15 mins before the close-probably not coincidentally either a that tends to be when smart money is most active.
There are other candidates as well, I'll be watching those and if they start looking more promising, post them tomorrow as well.
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