Taking Advantage Of Stock Weakness


Interesting post from Girlvestor below. This shows the issue with trading based on news. I’m sure many people heard about the United Airlines treatment of their customer and reacted by selling the shares. The issue here is that the news is already out there, so the effects of the horrendous United customer service are already priced into the price of the shares before you are able to hit the sell button. Often these things get overdone, however, so you might be able to take advantage as Girlvestor did. Often the shares will trade way down to start and then recover a lot of the loss the next day. I wouldn’t recommend buying and selling this way to make quick profits, but if you’re already setting up a position, it may make sense to take advantage of such events to add a few shares.

        

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One thought on “Taking Advantage Of Stock Weakness

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  1. Cool post. Trading on news can be profitable but I suppose my mind always wonders about whether it’s the result of fundamental changes in the company or noise. UA likely just noise – would I want to own the company though? No idea.

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