Rule #1 Of Trading: Pay Attention To How Stocks React To The News, Not The News

What matters more than the news, is how stocks react to news.

Case in point our recommendation on Monday of Arkansas Best (ABFS) a trucker. Their earning report was heinous. The stock started yesterday down 10% but by the end of the day it was higher.

This reaction probably drove the shorts crazy. No it did. We are in this name because 20123 is a huge turn around year and the shorts are overstaying their position. The one thing I have learned is that short sellers are awful at timing their trades as they do not believe in technicals and the fundamentals will trump the technicals.

That gets to Rule #2 that we will discuss at a later date: Fundamentals RARELY trump technicals.

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Rule #1 Of Trading: Pay Attention To How Stocks React To The News, Not The News

What matters more than the news, is how stocks react to news.

Case in point our recommendation on Monday of Arkansas Best (ABFS) a trucker. Their earning report was heinous. The stock started yesterday down 10% but by the end of the day it was higher.

This reaction probably drove the shorts crazy. No it did. We are in this name because 20123 is a huge turn around year and the shorts are overstaying their position. The one thing I have learned is that short sellers are awful at timing their trades as they do not believe in technicals and the fundamentals will trump the technicals.

That gets to Rule #2 that we will discuss at a later date: Fundamentals RARELY trump technicals.

Comments are closed.