Click here to Win!
Some stocks have predictable trends based on recent history. One of my top picks this year has been Click Software (CKSW). I recently read how in each of the past 6 quarters the stock has run up prior to the earnings report and then drops on the news (or the next day).
Fortunately, I was able to take advantage of this bit of historical knowledge. I sold my shares at $7.75 yesterday and today their earnings report came out. Although they reported record profits and forecast inline with estimates for next quarter, the share price plummeted nearly 20%. I added more shares today at the new, lower price of $6.40.
I realize that this is a risky trading strategy, but it has been working effectively for some stocks. I think the bigger players in the market (i.e. hedge funds) employ this strategy on stocks like FRE. I would not advise this strategy for most people - only those willing to take big risks for big rewards.
Anyone else have another example they would like to share?