Something that the NMG chart is not saying is that the counter had a bonus in ratio of 1:5 and a final dividend of KES 7.50. The books have closed and the ex all price should be KES 326/- (from the KES 400/-). The plunge to the current VWAP of KES 287/- is an overreaction by 13.5%. Any further downfall is welcomed for the buyers who want to re-enter/enter the counter. I expect the counter to soar as the market realizes that the counter benefited from elections and will report healthy 1H13 & healthy FY13 in line with econ factors.

4860...

I joined Team Bear late last week. Got concerned about the smoke: larger volumes & signal: lower lows. By yesterday, the Bulls & Bears seemed to have gone into caucus with lower volumes but in favor of Team Bear. We'll resume this next week. #Awash

Don't be suprised by the current market move. Q2 2013 market forecast can be found here http://www.contrarianinv...013-strategy-and-outlook

Waiting for further correction to enter this counter.

Why do some stocks sky rocket on a positive earnings surprise while others fall off a cliff?

In this article we are going to tackle this little-understood issue. Better yet, I will share with you two ways to profit from earnings surprises. More on that later.

3 Reasons Stocks Can Drop After a Positive Earnings Surprise

1) Estimates vs. Expectations: The standard definition of an earnings surprise is when actual earnings come in higher than earnings estimates. But those estimates are the "published" numbers from the brokerage analysts. Quite often investors tend to develop their own unique set of expectations that can differ greatly from the Wall Street analysts. If there is too much optimism ahead of the release, then actual earnings will need to be a blowout in order to appease investors' inflated expectations. This is the most common reason why some stocks fall after a "supposed" earnings beat.

2) Quality of Earnings: The highest quality earnings come from having robust revenue growth. This means that the company's products or services are in high demand and should stay that way into the future. However, these days far too much of earnings being reported is generated from cost cutting and other "accounting gimmickry". The problem with that is that the benefits of these moves don't last. When the market gets a whiff that the earnings are unsustainable, no matter how strong the beat, shares will most likely drop.


3) Forward Guidance: Plain and simple, when you buy a stock you are taking an ownership stake. And what owners of companies care about is the stream of future earnings. So if a company beats earnings for the quarter just reported, but warns that future quarters will see lower earnings, then that stock will go down...and go down fast.

By Steve Reitmeister
..I thought this would be a nice read for wazuans

Further to the above Steve adds

2 Ways to Make Money on Earnings Surprises

So now that we have outlined things that can go wrong after an earnings surprise, let's shift gears and talk about something even more important: How to turn a profit from earnings surprises. Here are two ways to go about it.

Good Way: Buy shares in any company that had an earnings surprise and rose the day following the news. These stocks experience what academics call the "Post Earnings Announcement Drift". Studies clearly show that these stocks usually outperform the market over the next 9 months. Conversely, you should sell any stock in your portfolio that misses its earnings numbers, as it likely to underperform the market for the next few quarters. The downside of this approach is that there are literally thousands of stocks to choose from every quarter.

Best Way: Find stocks where the earnings "whispers" tip you off that a big surprise is coming. Buy the shares shortly before the announcement and enjoy quick gains of 10%, 15%, 20% when the earnings surprise is officially reported.

I know what you're thinking. There are no Magic 8-balls for the stock market, so how can this be possible??? But fret not; this isn't a magic show. It's pure science.

The concept of finding a profitable source of earnings whispers has long been the Holy Grail of stock investing. Many experts have tried and failed to make this work. In fact, we had been researching this for 3 straight years.

The up and downs of investing, making money.

Had forgotten about that gap between 4600 & 4700 level. That too needs to get filled (closed) to create stable support.

Yields on the 91, 182 & 364 day papers have recently been on decline. This Wed, CBK will also auction 5 & 15 year papers. If the rates don't spike you should reverse your insipid market call