A few days before earning day, the stock may either correct or does not show any movement in any of the direction. On earns day comes the revenue as well as the profit estimates broadcasted by CNBC TV or ET NOW. The stock may open high or low depending upon the estimates. If the estimates are higher than what the street expects, then the stock may go up slightly. When earning is released and shown on TV, you will see a huge price change with a sudden spurt in volume.
You need to pay attention to little things before entering the trade.
First check whether the results beat or miss the estimates and by how far it did.
Now watch the stock movement you need to watch for 2 to 3 bars to get a clear understanding of stock movement and trade with the trend. You can either go with this trade as a positional buy since the stocks which beats estimates usually gets brokerage upgrades in the next day and stock gains further. If volume is too much then you can go for delivery and keep the stock for 3 to 4 days and get the maximum profit possible on the stock.
If price oscillates and does not give any clear direction stay away from trading.
It is not advised to take the trade before the earning is published because it is quite risky as well as boring to hold the stock till results.
After beating estimates of the street SBI gained 7 % today, Since the stock was near monthly lows the buying was so intense. You can hold it for targets of 320 within a few days.