When earnings season comes around it is absolutely critical to write down the earnings dates of any of your current holdings alongside any stocks you are considering an investment in. Today’s Ezchip (EZCH) -15% AM gap down is a great example of why.
Looking at the below chart you will see the stock offered two very decent entry points in the last week, first the break out of the descending channel (1) and second the break to fresh highs above $33.20 (2). Buying at either of these points without knowing earnings were due out this morning would have included added risk that would not fall into a tight profit loss ratio.
While Ezchip has rallied significantly off its $27.00 lows thus far today, any stop loss orders set prior to today would have been traded through in after hours putting any investor in a crappy predicament when the stock opened at $27.50, or they would have triggered for a quick and steep loss.
All in all, the reminder this stock has put forth today is very clear and simple, ALWAYS be conscious of earnings dates + times for any stocks being held or are under consideration for purchase and adjust your risk + exposure accordingly.
Stay frosty out there .