TM Editors’ Note: This article discusses one or more penny stocks and/or microcaps. Such stocks are easily manipulated; do your own careful due diligence.

Traders do not want to miss out on buying positions in a company that predict a large news event is on the way, why would you?Whether it be an announcement of a new product, earnings release, the hiring of an executive; it is important to focus on the period leading up to this announcement.This is also known as the hype period. 

While these “rumors” are considered unofficial news, they circulate.Often, the value of the rumor is recognized prior to the announcement by those on the inside. This is the time when traders accrue their positions in the stock.Typically, the stock runs leading up to the catalyst and  can often continue to run proceeding the news if it’s just as good or even better than expected.

 For example, let’s discuss the recent launch of Apple’s (AAPL) newest product, the iPhone 8.

Prior to Apple’s announcement of their latest smartphone on September 12, 2017, the hype certainly began in anticipation of the news.Looking at the chart of AAPL above, it is clear to see that the stock certainly ran as investors loaded up on positions along with the hype about the new product. 

Now taking a closer look at the chart, AAPL reported earnings on August 2, 2017, notice the E towards the top of the chart.On August 1, AAPL price per share was $150.05 and grew to $157.14 per share the next day up almost 5 percent with noticeable volume increase.On September 1, the stock’s price was $164.05 showing nearly a 10% gain for the month.

Investors heavily purchased shares beginning in July when the price of the stock was low, $144.02, knowing that once earnings were reported the stock would grow, which it certainly did. This is a clear example that emphasizes the importance of following a company throughout the period before their release of news.An easy way not to fear missing out on profits, follow the news and pay close attention to confirm that your hunch on the “rumor” proves to be true because if it is, you could be looking at a strong continuation trend to follow.