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Psychology of an announcement

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stargazer

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Hi all

Relatively new to the trading and shares compared to many. Over my short time i have been attempting to analyse the reaction to announcements.

Generally Good announcements have shown that the SP rockets up the retraces and takes off again.

Announcements that a preceived as bad recent AGS JORC for example and the SP tumbles.

Bad announcements well they go south.

Are there any clues to when announcements are likely to be at a certain time frame or are they adhoc.

If one was looking to capitalize on good announcements as a posible strategy irrespective of anything else could this be done. Yes i hear you say get more right than wrong and you are on a winner.

Reckon there would have to be tight rules if one was to go for a quick get in get out strategy.

For example buy 100000@20c sell at 25c when the market is hot on a particular stock. Small to midcap.

Recently i noticed
BMX
FNT
AGS
Positive announcements and at least a 5 cent gain.

With so many companies is there a way to scan i guess for announcements or an alert of some kind.

Cheers
SG
 
Hi stargazer

Im new to this game also. If you were a long term investor you would not need to worry about most announcements.

ceasar73
 
Why try and predict announcements / whether they will be good or bad?

Everyone thinks they can.. but if they everyone was 'right' then the price would not change at all after an announcement. If it does change, then it is NEW information that was not known beforehand or the information was different to what the market thought.

e.g. the expected profit was $1 million
announcement says profit was $1 million

Theoretically no change in the price.

It would be better to buy based on underlying fundamentals such as growth, dividends, etc..the announcements will take care of themselves if it's a good company.


Just my opinion.
 
You can 'guess' to some extent, in alot of cases you can see increased activity leading up to the announcement in the chart, it stands out once you know what you are looking for so yes you can jump on maybe a day or two or even three before the news is even realeased. in some cases also the announcement is already built into the price of the stock BEFORE the announcement is released, this is where the saying 'buy the rumor, sell the news' comes from so once the announcement has been made and everyone jumps on board taking up positions on the good news the smarties are selling of and the profits have already been taken. Obviously it doesnt always go this way, the stock is worth what someone is prepared to pay for it, so maybe it will just go up and up and up

this is just my thoughts
 
stargazer said:
Hi all

Relatively new to the trading and shares compared to many. Over my short time i have been attempting to analyse the reaction to announcements.

Generally Good announcements have shown that the SP rockets up the retraces and takes off again.

Announcements that a preceived as bad recent AGS JORC for example and the SP tumbles.

Bad announcements well they go south.

Are there any clues to when announcements are likely to be at a certain time frame or are they adhoc.

If one was looking to capitalize on good announcements as a posible strategy irrespective of anything else could this be done. Yes i hear you say get more right than wrong and you are on a winner.

Reckon there would have to be tight rules if one was to go for a quick get in get out strategy.

For example buy 100000@20c sell at 25c when the market is hot on a particular stock. Small to midcap.

Recently i noticed
BMX
FNT
AGS
Positive announcements and at least a 5 cent gain.

With so many companies is there a way to scan i guess for announcements or an alert of some kind.

Cheers
SG
Click to expand...


Predicting market moves from announcements can certainly be profitable however you have to be a lot more sophisticated about it than ‘this particular news means the market will do this’. The market is a complex beast and if you treat it like it’s simple, it will very often bite you. For example if there is a general nervousness over a period of weeks that the market is overbought, and the price is near strong resistance, a bit of bad news can trigger a wave of selling that lasts days. However if the general outlook is bullish and the market is trending nicely, it might shrug off the same news without missing a beat.

So you can also look at it from the reverse direction. Rather than trying to trade the news, you can use the market’s reaction to news, combined with technical analysis to pick good entries and exits, out or in, long or short. Being able to judge ‘market tone’ is one of the most valuable skills of a trader/investor, and you can only really master the skill by watching the markets closely over months and years – experience.

BTW if anyone knows of any good books on market sentiment I’d love to know, haven’t come across one before.
 
Thanks for the replies.

Yes activity prior seems to be a clue. Eg. BMX from average volume to 35m then an announcement.

I have noticed at times on forums people saying an announcement is due next week or a few weeks. Is this a guess or does the company signal an announcement is due.


Cheers
SG
 
stargazer said:
Thanks for the replies.

Yes activity prior seems to be a clue. Eg. BMX from average volume to 35m then an announcement.

I have noticed at times on forums people saying an announcement is due next week or a few weeks. Is this a guess or does the company signal an announcement is due.


Cheers
SG
Click to expand...

you can generally work it out.

for eg company starts drilling on 1 Jun they state drilling takes 4 weeks and expects results 4 weeks following. expect an ann 2 months later or there abouts.
 
Hi all

yes good points and i understand what has been indicated.

DJ i have not given a thought to drilling and time frames thanks for that.

I would think then having an idea of time frames with drilling/feasability/exploration/production puts things in perspective.

What i am a bit confused with is like FMG has not taken anything out of the ground and the SP has been higher than BHP.

Cheers
SG
 
Guys
IMO, it is extremely difficult to trade on market sentiment that arrives from a good/bad announcement. Some really positive, financially positive announcements can prove to be bad in the event that the market hyped them and the same goes for bad news.

My personal view is that good and bad news often comes in the direction of the trend - trade the trend, and the announcements will come.

Cheers
 
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