How will the stock market react to today’s earnings reports of giant tech companies like Google and Microsoft? Other popular earnings reports include Philip Morris, Morgan Stanley, Chipotle Mexican Grill, Intuitive Surgical and PPG Industries. Given the large number of reports making the headlines today, I’ll be focusing on those with an EPS estimate larger than $1. Although some reports will be available before the market’s open, I will still include the technical analysis on those stocks as well. So, let’s start with those.
Baxter International’s earnings report is announced before the open having an EPS estimate of $1.11. Previous year’s actual figure was $1.07 and BAX stock price hasn’t escaped out of the trading range between $50 and $60 for several months. I suppose the earnings report won’t be enough to push prices above the resistance level, although the gap pointed out at the daily graph might be filled due to today’s news.
Philip Morris International’s stock has been trending upwards for 3 years and has now reached a critical resistance level that has been confirmed 3 times during the past 3 months. With an EPS estimate exactly the same as last year’s actual EPS I expect an imminent breakout to new highs, especially if the company beats the estimate. 200-day moving average is rising and RSI hasn’t yet entered the overbought territory. Keep an eye on PM stock, in case your trading strategy scans for breakout formations.
Another company that is set to announce its earnings report before market’s open is PPG Industries. EPS estimate ($2.36) is higher than last year’s actual EPS ($2.12) and given the consolidation phase of PPG stock, there’s a likely breakout ready to be printed on the daily chart. The support level at $97 will provide the necessary condition to set a rather loose stop loss in case you are a position stock trader. Otherwise, PPG stock could provide the essential requirements for profitable day trading in the event of going any higher than the all-time high at $108.
Although Morgan Stanley EPS estimate is lower than $1 ($0.43), it may still provide good trading opportunities. The financial company posted a negative EPS last year (-$0.38) and perhaps today’s earnings report could earn the shareholders’ trust and help the support level at $12 hold up. MS stock could climb up to $20 – although resistance at moving average is expected – but it’s always better to be safe than sorry. That’s why a tight stop loss is crucial.
I’ll be back in an hour with Part II of the stock chart analysis.
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