Here’s your trade on Momo, Inc. (MOMO), which reports earnings tomorrow. (November 07, 2016)
MOMO GOOGL
Momo ( NASDAQ:MOMO ) is reporting earnings tomorrow. I just want to look at this as a potential trade. First of all, the fundamentals on this company are REALLY pretty impressive. Earnings growth is in triple digits, so is revenue growth with respect to quarterly earnings, and revenues versus the same quarter the prior year. The stock was on fire, and now it has just been consolidating. So this would be my suggestion: We have to look at this in two ways. First of all, if they report earnings and the stock gaps up, make sure you wait about 10 or 15-minutes in the morning after they report earnings. Make sure you WAIT to see if the stock is STILL above their opening print.
The reason I say that is, because you can even look at Google ( NASDAQ:GOOGL ). They reported solid earnings right here, right? Well the stock didn’t hold that little gap, instead it just continued lower, now it is doing what it is doing (but I am not talking about Google ( NASDAQ:GOOGL ). My point is, you can get all lathered up about some great earnings number; the stock gaps up, then it turns out that you bought from somebody who was selling, who had bought the stock down here. So you are being philanthropic and letting somebody else get out of a trade. Don’t be that guy.
On the other hand, if the stock gaps down because the market says, “Hey, enough is enough.” Back in July the stock was $9.00, now it is up how many hundred percent? Almost 200 percent above where it was then, and the market says, “Enough is enough,” then wait for the stock to stabilize before buying. If there is SOME chance, SOME how the company reports abysmal earnings and the stock comes down to the 200-day moving average, you know what? Buy everything you can. I wrote this down here to keep it in front of me: Chinese provider of mobile based social network platform,. There are70 million monthly active users, huge sales and revenue growth. That is to keep me in the stock even as the stock gyrates around (though I don’t have a position now). I am just saying, if it does happen to pull way back you want to buy it. If it gaps way up you want to wait for this stock to settle in, or it to PROVE to you that the gap is going to hold before you get into the stock.
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