Do stocks generally rise the day before/of earnings calls?

[akajoe75]

I know its bad to try and time the market, but I'm looking to get out of some positions in stocks I own and was wondering if stocks generally rise right before earnings calls, if no negative news is present?

I'm trying to decide whether I should sell it now or wait until before the earnings calls next week.

Thanks!

[slavaret2]

There is no clear cut pattern - stocks may rise, fall, or stay flat depending on the expectations, rumors, leaks, short positions, etc.

It is generally better to sell prior to earnings. If a stock gaps up on a positive surprise, there is usually more upside to profit from. But if it gaps down - you have a long way to go to recover your loss before you can start over.

[Eric M]

Tough, tough question. You are correct, it is difficult to accurately time the market.

The answer is sometimes. There are entire communities dedicated to trying to time or predict the movements following earnings. You can always try www.earningswhispers.com to hear what the "rumor" is for an associated earnings, but this is not always accurate.

Generally, if earnings calls are good, then the stock will probably rise. But take a look at Apple earlier this week - they had a great earnings call but the stock price fell. Other times, you may have a bad earnings - a loss - call, but if it beats market expectations the price still may rise.

You can attempt to look at prices charts - The Visual Investor is a great book - and gauge price direction immediately prior to a call for a determination of what the earnings will contain. But the bottom line remains that for every one you time or guess correctly, there'll be another time that the market will surprise you.

Remember - it's not so much as what the earnings call reports, as much as it is how does the call differ from what Wall Street expected?

Best of Luck.

[ijokey2000]

If you have some specific companies in mind, then go back and look at the daily charts. Find out when they announced earnings and see what those specific shares did before the announcements. There's no guarantee its going to happen again the same way, but if you see the same trend every time, that may help answer your question.