Exiting a Swing Trade During Earnings Season

If you've made a mistake with a trade, there's no shame in finding the exit.
If you’ve made a mistake with a trade, there’s no shame in finding the exit.

Don’t accidentally swing trade a stock during earnings season, like I did!

On January 27th I entered into a momentum-anticipation swing trade with Pacific Biosciences of California (PACB). I had a tight buy-stop above the previous day’s high, which was triggered at $8.15/share.

I did know enough to check their earnings report date, but I didn’t know the best places to look. Nothing on seekingalpha.com, nothing on finviz.com…so I dove in.

The stock did nothing after that mini-burst that got me into it, and continued trading in a small range.

THEN I get a news alert at the end of last week, saying PACB would announce earnings info after the close on February 3rd.

Crap!

Hmm, what to do, what to do. I didn’t get into this trade to bet on an earnings surprise. While pointless for predicting the future, I read analyst reports and looked at previous earnings, actual vs projected…and I came to the conclusion that I had not the foggiest notion as to what PACB would do after revealing their quarterly numbers.

So I put a reminder in my calendar before the closing bell yesterday to sell that puppy. It was very close to what I bought it at, so I put in a sell-limit order that would cover my initial investment plus my commission, and hoped it executed. If it didn’t, I would have pulled the trigger anyway at the end of the day.

Fortunately it was triggered, and I lost a total of $0.60 on the transaction. Not per share…total. 🙂 I’ll call that a wash.

In the mean time, I’ve found a nice and succinct earnings calendar on the NASDAQ site, which tells you when the next report should be coming up. It’s one thing to bet on a report with your eyes open. But otherwise, check your stock for upcoming reports before entering into that trade!

P.S. PACB reported an EPS unchanged from last quarter. And the stock is down 18% as I write this during midday trading. Glad I found the exit!

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