By Rachel Fox of FoxOnStocks.com

If you’ve read many my previous Fox on Stocks blog posts, you know I don’t EVER go for earnings plays. When a company reports earnings, it adds so much risk and volatility to any trade and makes price movement erratic and nearly impossible to predict. When you make a trade based on earnings reports, you usually use fundamental information about that particular company and buy long or sell short the stock based on how you feel the company performed the previous quarter.

This past earnings quarter, I stepped outside my comfort zone and decided to trade a stock during its earnings report release. I traded a stock whose company was predicted to show poor earnings. I was playing the contrarian in this situation and took a long position in the stock. The underlying stock was YHOO and the analyst consensus was that Yahoo’s earnings were going to be below analysts’ expectations.

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