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The T3 Morning Market Call: Could Apple Inc. Earnings Reinvigorate Tech?

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AAPL came out with a solid report last night and is up almost 5% this morning.

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World markets were mixed overnight but Europe showed a bit more momentum after recently inching along. China was off a bit but nothing drastic after a poor 11-month low flash PMI of 47.7. Yesterday the Chinese Premier did say the government would support a 7% GDP growth, which sparked a nice move higher. The Nikkei (INDEXNIKKEI:NI225) had some small profit taking.

The S&P (INDEXSP:.INX) is going on its third day of hanging above the previous May 22 high of 1687. This morning S&P futures are up 4-5 handles as that 1700 print still hasn't happened yet. When or if we do reach that level, I certainly don't think there will be balloons and confetti falling from the ceiling. I've never seen less enthusiasm for a market trading at all-time highs, likely because many are underinvested.

Tech has been weak overall this earnings season but other sectors have perked up to pick up the slack. I would certainly not have short on the brain unless we get a close below 1687 with force. There is a small ascending channel in this upper area that if broken, could lead to some corrective activity. I don't anticipate any major catalysts for the market, though, until the August jobs report and then the September Fed rate decision. This slow chop could continue for much of August.

No need to be even be "short" or "long" the indices when there's been more than enough to do in individual names as there has been two-way movement. This is a market of stocks right now rather than a stock market.

IWM could be something to watch as it's a bit extended from most moving averages. A close below $104ish could bring out some sellers. Otherwise this has been very strong but is currently a little extended.

Earnings continue to pour out and it's been a mixed bag for tech with lots of revenue short-falls, but EPS have been OK due to cost-cutting.

AAPL came out with a solid report last night and is up almost 5% this morning. The numbers were solid but there were no game-changers, so it's healthy to see AAPL surge on a modest report. Will this be the start of a major complexion change for AAPL? That remains to be seen. I'm not convinced it will make a big move off the double bottom until we see some new products introduced, but will be monitoring it after today's gap up. Based on my methodology, the stock must hold the majority of today's gap up and protect it for sessions to come. If it can stay above $432-434 it would be constructive, but for it to be truly different it would need to take out and close above $440ish.

BRCM, which has been weak leading up to its announcement, got pummeled after-hours following a weak report. The stock is down around 10% and now overall it's broken.

VMW bounced recently into its earnings report and delivered stellar numbers. The stock delivered on those heightened expectations and is up almost 15% pre-market. I would not chase it into the resistance area of $80-$82. Let it settle and base now.

Some earnings to look out for today.

Before the open:

BA was listed in my 2013 predictions and has enjoyed a great run this year as the stock is up 43% year-to-date despite on-going issues with its newest plane, the 787 Dreamliner. The stock is trading at highs above all key moving averages. Short-term resistance is standing at $108.15. The company is expected to report an EPS of $1.58.

CAT has been stuck in a macro downtrend, with a bearish head-and-shoulders pattern in place. The neck line, which is also key intermediate support trend line, comes into play at around $81.50. On a shorter term view, the stock has built a bear flag pattern that points to lower prices below $85. The company is expected to report earnings of $1.71 per share.

After the close:

BIDU has seen a monster move from $89 to $112 in less than three weeks, providing some calculated entries along the way. The next resistance stands at $114.88 where it could get some selling pressure from the downtrend that has been in place since 2011. Baidu's consensus EPS estimate is $1.22.

QCOM has a macro wedge pattern in place with a downtrend resistance that has been in place since March 2012. The stock has seen an intermediate-term pull back since April as it got some selling pressure from this downtrend at $68 area. It has another micro resistance spot at $63ish. Key support is $59-59.60 where the macro uptrend support comes in play. The consensus EPS estimate is $1.03.

FB has been acting a bit better recently, as it saw a slow grind up from June 6 low of $22.67. The stock reclaimed its 100-day moving average at $25.90ish on July 15 and is hovering around it, showing some commitment to that move. It has some short-term resistance at $26.78. The company is expected to report earnings of $0.14 per share.

The metals and mining stocks had follow-through this week.

GLD woke up with a nice gap on Monday that helped the precious metal to break out of the lower level range at $126ish. Then GLD held above this gap and got some nice follow-through yesterday. It has reclaimed the 50-day moving average as this is the first obstacle. The ETF has done some work above the gap from Monday and is holding this 50-day MA. Short-term momentum remains to the upside.

GDX, the gold miners ETF, saw bigger gains yesterday as it closed the day up almost 3%. It has reclaimed its 50-day with a nice gap up on Monday, and has room for a move toward the 100-day at around $30.13 on the upside. This group lead the metals off the lows and could be watched as a leading indicator.

SLV has been holding higher since the calculated entry at $18.30 On June 28 when the metals saw an ignited move off of lows. It had a nice gap up on Monday to break above the 21-day, and held above this gap yesterday. The ETF has room up to $20.53 where the gap from June 20 gets filled.

MCP gave us a tactical entry at $7.25 as the stock broke out of its bull flag pattern on Monday. After seeing some relative strength, it broke above the 200-day which led to some nice continuation yesterday as the stock tacked on another 6%. It cleared some intermediate-term resistance at $7.90 from prior pivot highs.

Sometimes I chuckle when I see headlines calling this the "Zombie Market" or the "Walking Dead Market." Those must come from the perspectives of people who are rolling up shorts or not involved. Those who obeyed the technical signals and have been participating in the rally with a plan on all time frames obviously see things differently. A glass-half-full approach with some common sense is a much better way to carry yourself in the markets and life.



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Scott Redler is long AAPL calls, MS, MCP, MGM. Short SPY.
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