For people who trade, my take away from this AMD share spike is this: if aftermarket trading after a conference call is significant, i should take that as a strong indicator of how day market trading will go the next day.
Looking at this AMD trade day in particular, i posted here that it went up 20% in aftermarket trading after their conference call on Thursday (most conference calls are after the market closes). Naturally, since the aftermarket is such a small portion of the overall trading market, i assumed it would go up another 5%-10% when the day market opened the next day (Friday). It did. It went up 15% the first hour. I missed out because i couldn't pull the trigger at 9:30 am... i had to sell some stocks to free cash to buy AMD and was at work trying to do all this online, and by the time that got done i already saw it go up 15% and figured it's overbought. It wasn't. It went up another 17% by 4pm (for a 32% spike in one trading day!).
So, rule of thumb:
1). Take the aftermarket action after a conference call as an indicator of how the day market will go the next day
2) Get in early at 9:30 am (when the market opens)
3) Always have some cash ready to invest the next day.
Is that a good take away? What are the perils of this strategy? I'm new to trading but this seems like a sound strategy for 2%-5% profits the next day of trading. Am i missing something? Sure there's no guarantees, but in general it seems like a sound strategy, no?