Hi everyone, Best buy BBY just announced earnings per share that exceeded expectations: 2.06 vs. 1.7 predicted and sales increased by 20%. What happened? The stock drop over 6%. Why ?????????? What is that phenomenom? Speculation around the earning day? Please help me to understand it.
A couple things. 1) It has been sideways trading this month. The dip on the 9th set the floor. Yesterday it was at the top of the range, so today is a pullback to stay in the range. 2) It has been weak relative to the sector, XRT this month heading right into the ER. No turnaround today, relative weakness continues. imo those two things together were indicative of no breakout from today's ER.
In a certain way it means that it take exceptional ER to break a stock appreciation weakness. Would you have anticipated this reaction the day before the report? Just curious...
Earnings plays are always a gamble. If your intent is to hold a stock for the long-term, you should probably not sell before earnings in most cases. If you're day trader, or swing trader the advice would be varying. My suggestion for any investment/trade/etc. is to know your plan before you put your money in and stick with that plan.
Highly thankfull for your suggestion, I appreciate the time you have spent to share your insightful comment, which will be seriously considered and implemented. Any suggestions for a successful plan?
