Every week of the year, there are a handful of stocks that make outsized moves, eliminating or building up a mountain of wealth in the blink of an eye. Usually, it's impossible to know which stocks these will be. However, there are three stocks we can be relatively certain will make big moves this week: Capstone Turbine Corporation (NASDAQ:CPST), Finisar Corporation, (NASDAQ:FNSR), and Lululemon Athletica (NASDAQ:LULU).
The reasons these three are such prime candidates for volatility is that share two key traits. First, each is reporting earnings this week. And second, each is heavily shorted -- that is, each has lots of investors betting against any short-term success.
When these two variables collide, big moves are usually the result. In fact, last time I predicted three such moves, the chosen stocks moved an average of 8% after earnings were reported.
While it may be tempting to make trades to capitalize on this volatility, I wouldn't suggest it. There's no telling whether or not these moves will be up or down. If you already hold shares of any of these three companies, you need to ignore the noise and focus on what's really important. Check out the slideshow below to see what you should really be keeping your eye on and what's just noise to ignore.
Brian Stoffel owns shares of Lululemon Athletica. The Motley Fool recommends Lululemon Athletica. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.