Dictionary of Finance and Investment Terms: selling on the good news
selling on the good news
practice of selling a stock soon after a positive news development is announced. Most investors, cheered by the news of a successful new product or higher earnings, buy a stock because they think it will go higher: this pushes up the price. Someone selling on this good news believes that the stock will have reached its top price once all those encouraged by the development have bought the stock. Therefore, it is better to sell at this point than to wait for more good news or to be holding the stock if the next announcement is disappointing. Compare with buying on the bad news.
