Stocks often run up the week before earnings. This can be a very predictable
trading strategy no different than playing volatile biotechs as they walk up the
charts prior to FDA rulings. In the two weeks before Chinese Internet stars
Baidu (NASDAQ:BIDU) and Sohu.com (NASDAQ:SOHU) reported Q3 earnings, each stock
pulled back roughly 12% in the first five days before running up 17% and 25%
respectively in the second five days just before the earnings announcement. If
you're like me, then you look for great opportunities to play the swings on
stocks running into earnings season. If we start two weeks out, just like the
two above, Renren (NYSE:RENN) shows a similar pattern heading into its earnings
report this Thursday. Renren however, has pulled back more aggressively than
Baidu and Sohu.com combined or about 26%. With four days remaining before Renren
reports Q3 earnings, I'm looking for shares to rebound from Friday's low of
$5.18.
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