Re: How do prices behave before earnings announcement?
Price behviour pre-earnings is not a reliable indicator but I did some work on price behaviour post-release across the FTSE350 some years back - there was a small excess of price performance in the direction indicated by the price movement on the day of the release, up or down, compared to the previous session's close, over 3 days. So it would be possible for example to go long if the price on release day ended higher than the previous day's close, using the previous day's close as the stop. It works quite often, but over such a short period the reward did not really justify the risk. Over a longer period, the release date tended to be less significant. I have seen a Sandy Jadeja video in on the web which he explains the same strategy. |