How can you trade a stock after it has announced a trading update? This is an important one if you're trading around earnings season or investing in stock after good solid earnings.

Post-Earnings Announcement Drift (PEAD)
This is when a stock continues to move in the direction of surprise earnings. Say a stock like Apple - something comes up where Apple earnings are good - the stock initially rallies but in the following days the stock will continue adjusting to the new information and rising. This may go on for up to 60 days. As traders or investors we can use two strategies (at least) to take advantage of this either as a momentum play or as an opportunity to buy out bombed-out stocks which we believe in.

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