Let’s say your UK Index shares are in profit, up 10%. Results are out tomorrow and numbers are expected to be good. But the shares have rallied; hence your 10% profit. Furthermore, they’re flirting with prior highs but yet to break above.

You have a dilemma.

Expectations for good results probably helped the shares rally. So number (or outlook) need to be even better to push the shares above resistance. If they disappoint, the shares will probably fall as investors look to take profits. It would be nice to see your profits rise. It’d be a shame to see them eroded.

A decision needs to be taken.

Keep your position open, and hope the report is good. Ideally better than market expectations. Your current 10% profit could become 15%. If the shares do little on the day, you could always close the position roughly where you are now.

But this is still very optimistic and traders need to be pragmatic. What if the financials or outlook disappoint and the shares drop 5%? That 10% profit is now history. What if things are terrible and the shares drop 10%? Back to square one.

“A bird in the hand is worth two in the bush“

A very apt saying. A major risk event like results can be a great excuse to bank profits. You may miss out on the chance of greater profits. But whether results are good or bad, your banked profits are protected.

If they are great and the shares break higher (above resistance) you can always buy back in again, aiming to capitalise on momentum. If they disappoint and the shares tank, and you still think they’re a bargain, you can always buy back in again. A second bite at the cherry.

Accendo’s award-winning research service includes highlighting companies reporting so clients are aware when positions could be impacted. We have just published our Week in Advance. I see lots more big UK Index names reporting.

Furthermore, we publish 60 trade opportunities a week. This means a high probability that any big UK Index names you hold are mentioned at some point. Even if they’re not reporting results, perhaps they are close to resistance, at the top of a range, or have posted strong momentum. Profits worth taking?

Whether you like ranges, candidates for a rebound, shares on a breakout, those displaying momentum or names reporting results or paying dividends, we have something for everyone.

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Mike van Dulken, Head of Research, 8 March 2019