MIT studied it. Harvard did too. So did the Fed.

When a company beats earnings by more than the market priced in, institutions do not come in and buy their full position the next morning.

They buy over time, gradually, day after day.

The stock grinds higher the whole time.

This is one of my favorite setups to trade, and I run it exclusively in Profit Surge Trader.

Wednesday night, I recorded a breakdown of exactly what I look for.

Three things matter the most.

The stock has to beat the expected move – not just beat EPS – but actually move more than the market priced in.

A high short float makes the setup stronger because shorts have to cover, adding fuel. Ideally, there is room to run, meaning the gap takes the stock above a significant level of prior resistance.

Your Action Plan

I walk through a real trade that covers all three in Fastly (FSLY).

The stock gapped above years of sideways price action on earnings and kept grinding higher for weeks.

The indexes were getting hammered. This stock did not care.

I also show how I apply my TPS system to it.

Watch the full breakdown below.