3 Big Stock Charts for Friday: Bank of America Corp (BAC), Morgan Stanley (MS) and Apple Inc. (AAPL)

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U.S. equities largely moved lower on Thursday after Apple Inc. (NASDAQ:AAPL) was smashed lower on reports of a 20% to 30% year-over-year drop in iPhone production later this year — when things should be ramping up for the iPhone 7 launch.

3 Big Stock Charts for Friday: Bank of America Corp (BAC), Morgan Stanley (MS) and Apple Inc. (AAPL)There was more bad news on the retail front as well ahead of Friday’s retail sales report. Kohl’s Corporation (NYSE:KSS) lost 9.2% after reporting an earnings miss on a 3.9% drop in comp-store sales (vs. 0.2% growth expected). Nordstrom, Inc. (NYSE:JWN) fell more than 14% after the close after reporting an earnings and revenue miss on a 1.7% drop in comp-store sales. Forward guidance was also cut.

With large-cap stocks at critical support levels, as the Dow Jones Industrial Average threatens to fall below its 50-day moving average for the first time since late February, keep an eye on these three stocks:

Bank of America Corp (BAC)

BACchart_051316Bank of America Corp (NYSE:BAC) shares look vulnerable to a breakdown below its post-February trend line support near $14 as financial stocks look like the next major sector group set for a bout of weakness after enjoying a surge on better-than-expected but still weak earnings in April.

The deployment of negative interest rates in Japan and Europe, a recent rally in U.S. Treasury bonds, a dropoff in IPO and M&A activity, and ongoing energy sector defaults should all continue to weigh on profit growth.

The company will next report earnings on July 18. Analysts are looking for earnings of 37 cents per share on revenues of $20.97 billion. Edge Pro subscribers are holding a position in the June $14 BAC puts.

Morgan Stanley (MS)

mschart_051316Morgan Stanley (NYSE:MS) looks vulnerable to a drop below its 50-day moving average for the same reasons BAC looks vulnerable. Watch for a recent uptick in credit loss offsets — reversing a trend the big banks have enjoyed since the end of the financial crisis — to directly weigh on earnings going forward as energy sector loans go bad.

The company will report results on July 18. Analysts are expecting earnings of 63 cents per share on revenues of $8.4 billion. Edge Pro subscribers are holding a position in the June $26 MS puts.

Apple Inc. (AAPL)

aaplchart_051316

AAPL and Alphabet Inc. (NASDAQ: GOOG, NASDAQ:GOOGL) are battling it our for the title of the largest U.S. stock by market capitalization. AAPL shares tested below the $90-a-share threshold for the first time since 2014 Thursday as critical support falters.

The Nikkei Asian Review warned of weak demand for the upcoming iPhone 7 — which reportedly will be just another modest refresh of the iPhone 6 form factor. Coming on the heels of a big earnings miss on the first ever drop in iPhone sales, this is fueling concerns about weak demand as the smartphone market gets saturated and Apple’s pace of innovation slows.

Edge Pro subscribers just closed a 283% gain in their May $107 AAPL puts.

Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/05/bac-aapl-ms-big-charts/.

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