Profiting from Panic: How Negative News Can Lead to Smart Stock Buys

What is the fuss?

News impacts listed stock price movements. It sways the price wildly, making it go up or down in a single day. This causes volatility.

Investors who know how to befriend volatility can use it to make huge short to mid-term gains.

How? Well, news settles down over time. Deeper research gets done and shared subsequently. The real impact is revealed, whether it is or there is none. And then, the stock price that stumbled up or dwindled down, reverses back to reflect its true value.

In this post, I share:

(a) Five scenarios where news-based volatility creates good buying opportunities

(b) Examples where I have used these situations to make decent profits in a matter of months

(c ) A framework you can use to evaluate news-induced volatility to decide on a buy call for short-term gains.

Let’s dig in.

Scenario 1: Negative Regulatory Actions⚡ 📜

National regulators put penalties and sometimes impose business restrictions on a company till it complies with the required compliance guidelines or audit observations.