Why Guidance Matters More Than You Think

At the end of the day, when you’re buying a stock, you’re staking a claim to a company’s future performance. That’s why the market can be so sensitive to any hint of lowered guidance. No matter how good earnings are, no matter how much business sense adjusting that guidance makes, a lowered outlook for the long term can wreck a stock’s near-term prospects. That’s exactly what we saw with Palo Alto Networks this week; excellent earnings, not-so-hot guidance. Nvidia, on the other hand, produced excellent earnings and positive guidance. The stocks’ performances couldn’t be more different. 

As traders, we have to take these reactions, whether they’re rational or not, into consideration when we plan our trades. Here’s how… 

TheoTrade Daily Chatroom Schedule for February 22, 2024

9:20 AM to 10:30 AM: Blake Young
10 AM to 12 PM: Gianni DiPoce
12 PM to 1 PM: Brandon Chapman
1 PM to 2 PM: Tony Rago
2 PM to 3 PM: “Slim” Miller
3 PM to 4 PM: Corey Rosenbloom

ICYMI: Catch the Replay of Gianni’s Live Stock Pattern Webinar
Find a strong stock, and you’re onto something. Find the pattern that moves that stock, and it can be like a license to print money. That’s what Gianni DiPoce’s webinar today was all about - finding those killer stocks and spotting the patterns in them that can lead to windfall profits. Click here to watch the replay… 

Don’t Risk Your Capital When You Can Play with “House Money”
My favorite strategy is deceptively simple - it’s the same technique I used to bag a 485% gain on Microsoft recently. I put on a low-risk, high-probability trade on my “secret weapon” asset (one of the more boring plays out there) and watch the cash pile up. Then, I roll the profits into something with a little higher risk… but an even bigger potential payout… without putting a nickel of my own money on the chopping block. I’d encourage everyone to try this strategy, and next week I’m going to teach you all about it. Stay tuned…
 
We’ll talk again soon,

Don Kaufman
Co-founder, TheoTrade