The fireworks won't end with the 4th of July celebrations -- at least not on the stock market. This week, shares of The Container Store (NYSE:TCS), Fastenal Company (NASDAQ:FAST), and Bob Evans Farms (NASDAQ:BOBE) will all be showing off their own kind of explosions.
Let me explain: Each of these companies are at the intersection of two variables that, when they meet, often create volatility. The first of those two is that investors are selling a large number of shares "short" -- or betting against their success. The other is that each is reporting earnings.
If you don't believe such circumstances create volatility, simply look at the last time I tried to pinpoint such variables: The stocks mentioned moved an average of 8% following their respective earnings release.
But don't be misled: I don't think anyone should trade based on these trends. Instead, I think it's far more Foolish for current shareholders to prepare for volatility, and know what to really look for when their companies report. To find that out, check out the following slideshow.
Brian Stoffel owns shares of Berkshire Hathaway and The Container Store Group. The Motley Fool recommends and owns shares of Berkshire Hathaway and The Container Store Group. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.