One of the best swing strategies on Wall Street is to buy stocks that gap up on earnings announcements. Why? Because stocks that gap up on strong earning reports tend to produce unusual returns due to a phenomenon known as the Post Earnings Announcement Drift (PEAD). The following list of stocks gapped up on strong Q2 2020 earning reports and produced substantial post-earning announcement drifts.
I am currently building a software product which will track stocks that gap up on earnings announcements. Objective: keep traders informed of all of the stocks that can potentially produce substantial PEAD returns. The rules will be simple:
- The stock has to gap up (at least +3%)
- The stock has to gap up into a 52w new high
- The stock has to attract unusual volume in the opening minutes
- The stock has to break above the pre-market’s high
- The stock has to close above the open
The following stocks met these conditions and are producing strong positive returns for their shareholders. The software will notify its users whenever a new name / symbol meets these criteria.
Q2 2020 PEADS