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Something I’ve seen a lot more of in 2025 is a very decent share getting sold off on results day and in the days after. This drives investors wild!
“Why oh why?” they moan.
Their favourite share has been going up and they are very happy, indeed boasting to their friends about how much money they’re making.
Their friends probably roll their eyes, waiting for the company to do badly later in the year. Instead, the company results are great!
The trader is vindicated! What a smarty-pants. But then the share price actually tumbles.
What?! How can such an amazing company be treated like that?
Well, an old stock market cliché has stuck around for a reason: ‘Buy the story, sell the news.’
The share price went up a lot because the good news was expected.
Once the good news is out, traders say: “Well, OK, we got the positive results we anticipated, the shares have had a good run, time to take profits.” Which of course makes the price go down.
Often profit takers gather momentum, and shares carry on falling for a few days. But this painful reality isn’t just something traders have to learn to live with. It presents an opportunity.
If you are in a great share, it is way up and has been rising strongly, it can be a good strategy to sell some of your holding the day before and bank some profits.
Or, take a chance, sell all, wait for the price drop and buy back a few days later – once the profit-takers are gone.
I’m talking shares that have gone up maybe 20% before results. That kind of surge means part of the success of the company is baked into the share price.
The actual results have to be way, way better than expected for the share price to carry on rising on results days.
You’ll sometimes find a good news story will initially push the share price up. But then, traders will come in and bank their profits. Wait till they’re done, and buy up.
If in doubt about selling a good one before results, go in and research it again. Has the rating now gone too high for your liking after a big rise?
Perhaps it isn’t the bargain it was when you initially bought it?
A couple of recent examples.
After some massive rises Cohort produced an excellent in line report.
Even so, shares went down massively on the day.
Guess what happened next?
You guessed it: two days later they were back up.
You could have banked some profit the day before and bought back cheaper the day after.
Investors’ favourite Games Workshop tumbled the day it released a statement which even said it was enjoying record profits.
Shares promptly tanked on the day.
A few days later? Nicely back up!
So, selling a winner the day before results then buying it back a day or days later can work.
Finally, if you have seen a share soar and are annoyed you never got it, this could be your chance.
Buy towards the end of the day of the statement as it slumps or in the day or two afterwards.
Good luck!
