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2 Breakdown Stocks to Fade This Earnings Season

by | Nov 12, 2021 | Stocks

You might not believe it when I say there are some weak stocks to fade right now — positive earnings reports continue to roll in and most names are near all-time highs — but it’s true, folks…

When earnings estimates get too high and prices supersede those figures, there tend to be downside reactions. 

So it’s all about expectations versus actuality…

Once expectations become a bit too much, the result is a steep downtrend in the asset’s price, or as I like to call it, a correction. 

That’s why I want to give you some weak stocks to fade right now that experienced so much upside during the COVID-19 peak that the actual numbers just can’t keep up. 

2 Weak Stocks to Fade Right Now 

Now, you might not know this, but Microsoft and Google are notorious for downplaying their earnings estimates so that the actual numbers come out much higher than expected. 

This ultimately causes the stock price to gap up and rally in the near term. 

But to make matters even worse, with the changes in the current socioeconomic environment (bye-bye, COVID-19), stocks that rallied sharply during the pandemic are now left out to dry…

…creating opportunity in these weak stocks to fade right now. 

The best way to take advantage of this is to sell the weakest stocks because investors usually sell the strongest names since they’ve gone up most of the time.

But in actuality, those stocks have the strongest resistance against going down. The companies that have been in a steep downtrend are prime candidates for further downside action because their sentiment has already turned bearish some time ago. 

So check out my short video to learn more about this strategy and which weak stocks to fade right now. 

Don’t forget to like and subscribe to our YouTube channel if you haven’t already so you can be notified as soon as we post our next video and see what other trade opportunities we’re paying close attention to! 

WRITTEN BY<br>Roger Scott

Roger Scott

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