🌪 Beeks' "big reveal"

Beeks Financial Cloud (BKS) put out a big-hitting RNS last week.

The company revealed that its working with Nasdaq.

Now, I already knew this.

And because I wrote about Beeks in August and shared proof that the contract was actually Nasdaq, you probably already knew this too.

So riddle this...

What happens when a company puts out news that sounds like a surprise, but actually isn’t?

The answer is it quickly sells off.

This is because the information is already in the price, and therefore any rally gets sold into.

We can see that the stock gapped to 272p from 264p, rallied to 291p, then sold off the rest of the day and barely closed above the previous session’s close.

Meaning that the news was entirely a non-event.

This is why intraday trading and buying on news is tricky.

And before we continue, a quick thank you to today’s sponsor who helps toward the upkeep of this newsletter.

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To understand how a stock might react to a piece of news, you need to understand the context and the narrative.

For example, Card Factory (CARD) was (and still is) a highly popular retail stock last year.

And every time it would put out good results, the stock would gap up, and get sold heavily into.

Teleios was a known seller, and so on any liquidity event they did what sellers do… sell.

That means if you were buying on results, you were the schmuck.

Your goal as a trader is to understand the stocks you trade and don’t be the schmuck.

1. Before you open a trade on news, make sure you know what the stock is responding to

2. Check how the stock has responded previously

3. Assess if the news premium is worth paying (e.g. a stock that is ‘slightly ahead’ of expectations gapping 20%? Probably not)

By following these three points it should significantly reduce the amount of silly trades you place.

And whenever you’re ready..

There are three ways I can help you.

1. If you’re wanting to profitably trade UK stocks then I’d recommend my entry level course:

Spread Bet Accelerator: The exact system I use to trade and get you to your first £10k in profits. Use the code GIVEME99 for a subscriber discount.

2. Want more trading ideas and a clearer view of the markets?

Buy The Bull Market Premium: Free 30-day trial covering potential trades and insights as a professional trader.

3. Want to work with me personally?

Alpha Trader is where I work closely with traders who want to get to a professional level.

We have our own channel, meet up, and have fun trading and learning [opens February].

Speak soon!
Michael