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Traders do not want to miss out on buying positions in a company that predict a large news event is on the way, why would you?Whether it be an announcement of a new product, earnings release, the hiring of an executive; it is important to focus on the period leading up to this announcement.This is also known as the hype period. 

While these “rumors" are considered unofficial news, they circulate.Often, the value of the rumor is recognized prior to the announcement by those on the inside. This is the time when traders accrue their positions in the stock.Typically, the stock runs leading up to the catalyst and  can often continue to run proceeding the news if it’s just as good or even better than expected.

 For example, let’s discuss the recent launch of Apple’s (AAPL) newest product, the iPhone 8.

Prior to Apple’s announcement of their latest smartphone on September 12, 2017, the hype certainly began in anticipation of the news.Looking at the chart of AAPL above, it is clear to see that the stock certainly ran as investors loaded up on positions along with the hype about the new product. 

Now taking a closer look at the chart, AAPL reported earnings on August 2, 2017, notice the E towards the top of the chart.On August 1, AAPL price per share was $150.05 and grew to $157.14 per share the next day up almost 5 percent with noticeable volume increase.On September 1, the stock’s price was $164.05 showing nearly a 10% gain for the month.

Investors heavily purchased shares beginning in July when the price of the stock was low, $144.02, knowing that once earnings were reported the stock would grow, which it certainly did. This is a clear example that emphasizes the importance of following a company throughout the period before their release of news.An easy way not to fear missing out on profits, follow the news and pay close attention to confirm that your hunch on the “rumor” proves to be true because if it is, you could be looking at a strong continuation trend to follow.

Other companies are started to see volume and price action ahead of earnings.Take Potnetwork Holding (POTN) for instance.The CBD company has had a banner year to date and by all indications from recent press, they aim to keep it that way.Both the first and second quarter saw record-breaking revenues and month-over-month, the company continues to outperform.

For the months of July and August this summer, the company’s reported revenues have already surpassed the entire second quarter results.With September figures to factor in, it could mean uncharted territory for the company.The main reason is that in its most recent announcement, Potnetwork management stated, “We continue to be excited by our continued escalating revenues month-after-month. We attribute these gains to increasing consumer acceptance of our products, and the expansion of our distribution network and product line. This summer underscores what we believe is a sustainable sales momentum that should further springboard sales in the 4th quarter strengthening an already record year.” She added, “When released, we are confident that our official third quarter and year-to-date operating results will reflect the continual strengthening of our organization and brand, our growing market penetration, and the superior value of our products.”

Potnetwork is unique in that it has been one of the few companies within the cannabis space to actually record net profit and cashflows even during the early stages of growth following the acquisition that gave them access to the Diamond CBD brand. Being that this is the first full year for Potnetwork to report sales of Diamond CBD, market momentum in the cannabis space could be of benefit as we’ll see in the two additional marijuana stocks to watch during the fourth quarter.

Another stock in the sector to monitor during earnings season is Zynerba Pharmaceuticals  (ZYNE).Though this is more biotech than marijuana, the case remains the same.Even though earnings may not be the major market catalyst for Zynerba, industry catalysts can be.Typically cannabis companies end up seeing a fair amount of activity later in the year due to changing legislation and material events.For Zynerba, that could mean a host of things.

Most recently the company released data from three midstage studies involving its lead drug ZYN002, a cannabidiol (CBD)-based gel. Even though the company’s ZYN001 still a ways away from producing meaningful clinical data, its ZYN002 performed very well in the Fab-C trial for patients with Fragile X syndrome. This opened the door to very positive results including a clinically meaningful improvement of 46% in the total score of Anxiety, Depression, and Mood Scale at week 12 compared with baseline, and improvements in all measures of the Aberrant Behavior Checklist for Fragile X.

It’s also important to note that the company saw much of its price action during the fourth quarter of 2016 and into the first quarter of 2017.Shares of Zynerba rose from $13 to highs of almost $20 before year end.The move continued well into the first quarter of 2017 with shares seeing highs of over $22 per share.

Similarly, Cannabis Science (CBIS) may be starting to see progress within the market during October and the 4th quarter.The company’s stock has been beaten down over recent weeks but an uptick in price this week could be a signal for a reverse in trend.The company develops cannabinoid-based medicines and just recently it had announced that the American States University Department of Agriculture industrial hemp research project is making good progress.

Raymond C. Dabney, President & CEO, Co-Founder, Cannabis Science Inc., stated, "This intense growing demand is the reason we are doing this, we can undoubtedly provide a large amount of cannabinoids for such large medical research projects for critical ailments, however, our research, no matter how large, will only touch the tip of the iceberg of need. This strongly underlines the disparity between the lack of supply and the rising demand for cannabinoids as evidenced in the Nevada shortage this year as well as other indicating factors of serious concern."

The American States University partners have worked closely with Cannabis Science and Free Spirit Organics Native American Corporation for this project. During the fourth quarter, last year, shares of Cannabis Science saw a move to highs of nearly $0.08 with momentum propelling it into the first quarter of 2017 and highs of nearly $0.14