Are stocks more likely to go up or down after earnings? In this article, you’ll discover what our analysis of 213 post-earnings stock reactions revealed, including why 56.8% moved higher versus 43.2% lower, how positive and negative reactions averaged +12.30% and −12.04%, and why 116 stocks experienced initial moves exceeding or reaching 10%. You’ll also learn why predicting earnings reactions isn’t much better than a coin flip, how initial momentum can continue, stall, or reverse, and why waiting until after earnings may offer traders a more informed approach.
Do stocks typically rise or fall after earnings announcements? And can traders and investors reliably predict which direction prices will move?
To investigate, Paper Trading Journal analyzed 213 post-earnings stock reactions between May and October 2026, examining the direction and magnitude of each stock’s initial hourly earnings candle.
Our findings suggest that stocks react positively to earnings more often than negatively, but the difference is considerably smaller than you might expect.
More importantly, our research highlights why predicting a stock’s initial earnings reaction can be little better than a coin toss.
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View on Amazon →Quick Answer: Are Stocks More Likely to Gap Up or Down After Earnings?
Of the 213 post-earnings stock reactions analyzed by Paper Trading Journal, 121 stocks (56.8%) initially moved higher, while 92 (43.2%) moved lower. Although positive reactions were more common, the difference wasn’t much better than the odds of a coin flip. Furthermore, our selectively collected sample measures the first hourly earnings candle rather than the exact opening gap, and these historical results don’t necessarily predict how stocks will react to future earnings announcements.
Earnings Reactions: Key Statistics
Paper Trading Journal Research | 213 Stocks | May–October 2026
(121 stocks)
(92 stocks)
Additional Findings
- 116 of 213 stocks (54.5%) experienced an initial move of at least 10% in either direction.
- 26 stocks (12.2%) experienced an initial move of at least 20%.
- 13.6 percentage points: The difference between positive and negative reaction frequencies.
- Nearly identical magnitudes: Average upward and downward moves differed by just 0.26 percentage points.
- Momentum isn’t guaranteed: An initial move can continue, stall, or reverse sharply in the following session.
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View on Amazon →How Much Do Stocks Typically Move After Earnings?
Interestingly, while positive reactions were more frequent, the average magnitude of upward and downward moves was nearly identical.
Among stocks moving higher, the average initial hourly change was +12.30%, compared with an average decline of −12.04% among stocks moving lower. The median changes were similarly close, at +10.62% and −10.97%, respectively.
Large price movements were also relatively common:
How Often Do Stocks Move 10% or More After Earnings?
Initial hourly price reactions across 213 stocks
Source: Paper Trading Journal, 213 post-earnings stock reactions. Bar lengths represent the percentage of the full sample: 30.5%, 23.9%, and 12.2%, respectively. The 20% category overlaps with the 10% categories.
Across the entire sample, the average absolute initial hourly price change was approximately 12.19%.
However, because our dataset specifically focuses on stocks with notable post-earnings price movements, these results shouldn’t be interpreted as the average earnings reaction across all publicly traded companies.
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View on Amazon →Does a Stock’s Initial Earnings Reaction Predict What Happens Next?
Not necessarily. Although stocks in our research frequently continued moving in the direction of their initial earnings reaction, that momentum was far from guaranteed.
Some stocks continued climbing or falling throughout the following trading session, creating opportunities for post-earnings momentum traders. Others stalled almost immediately, while some, like AA and AFRM shown below, experienced violent reversals that erased much or all of their initial earnings move.
A stock might initially surge 15% following a strong earnings announcement, only to reverse as traders take profits or reassess its valuation. Conversely, a stock that initially falls 10% could recover sharply as investors reconsider the company’s outlook.
The initial earnings reaction tells traders how the market responded to an announcement. It doesn’t tell them with certainty what will happen next.
That’s why our post-earnings momentum research goes beyond simply identifying stocks that rise or fall after earnings.
We also examine hourly and four-hour technical breakouts, earnings guidance, candlestick structure, and subsequent price movements to identify conditions historically associated with stronger momentum continuation.
Even then, no combination of indicators can eliminate the possibility of a sudden reversal.
Is Predicting Stock Price Direction After Earnings Just Gambling?
Based on our findings, trying to predict whether a stock will initially rise or fall following an earnings announcement is highly speculative.
Our sample produced a 56.8% probability of a positive initial reaction. While that’s better than 50%, it’s hardly a dependable basis for making a trade or investment decision, particularly when individual stocks can move 10%, 20%, or more in either direction.
And even predicting the initial direction correctly doesn’t guarantee a profitable trade. A stock can rise immediately after earnings and subsequently collapse, leaving investors who entered too late with substantial losses.
There is also an important distinction between observing a 56.8% historical frequency and having a reliable 56.8% probability of predicting future price movements.
Our research establishes the former, not the latter.
For that reason, buying or shorting a stock immediately before earnings, based primarily on a prediction of which direction it will move, arguably has more in common with gambling than disciplined trading.
This is one reason our post-earnings momentum strategy focuses on evaluating price action after the market has already reacted to an earnings announcement, rather than trying to predict the announcement’s immediate impact.
Waiting for the initial reaction doesn’t eliminate risk, but it provides additional price-action information that simply isn’t available beforehand.
Learn the Fundamentals of Technical Analysis
John J. Murphy’s Technical Analysis of the Financial Markets covers charts, trends, indicators, candlesticks, intermarket relationships, and other core technical analysis concepts.
Price: $34.27–$35.50
View on Amazon →Conclusion: Are Earnings Gaps More Often Positive or Negative?
Of the 213 post-earnings reactions analyzed by Paper Trading Journal, 56.8% moved higher and 43.2% moved lower during their initial hourly earnings candles.
Positive reactions were more common, but the average magnitude of upward and downward moves was nearly identical, at approximately 12%.
These findings don’t establish that stocks will continue reacting positively more often than negatively in the future. Nor do they guarantee that an initial price movement will continue into the next trading session.
Ultimately, predicting which direction a stock will move immediately after earnings isn’t much better than guessing heads or tails based on our observed sample frequencies.
For traders, the more useful question may not be whether a stock will initially rise or fall, but whether its subsequent price action presents a favourable opportunity with a clearly defined risk.
Methodology: Analysis of 213 post-earnings stock reactions collected by Paper Trading Journal between May and October 2026. The study measures the direction and magnitude of the first hourly earnings candle rather than exact opening gaps. The sample is selectively collected and is not representative of all earnings announcements. Historical results do not guarantee future performance.
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View on Amazon →If you want to go deeper:
- Explore the Trading Statistics Hub to understand how different sectors behave across market cycles
- Study real setups inside the Trade Reviews section
- Learn the framework behind high-probability setups in the Post-Earnings Momentum Strategy
This is how you turn raw market data into repeatable trading edge.
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