3 Big Stock Charts for Tuesday: AbbVie Inc (ABBV), Gilead Sciences, Inc. (GILD) and Sprint Corp (S)

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Earnings season brings big moves from stocks, but these moves always leave a big question: “is it too late to buy into the earnings news?” Three movers from Monday’s earnings results are AbbVie Inc (NYSE:ABBV), Gilead Sciences, Inc. (NASDAQ:GILD) and Sprint Corp (NYSE:S). Today’s Three Big Charts aims to answer that question.

AbbVie Inc (ABBV)

AbbVie Inc (ABBV)
Source: Chart courtesy of StockCharts.com

AbbVie shares closed-out after-hours trading just over 1% higher after a positive earnings report. The company has been one of the relative strength leaders within the biotechnology sector of late, as their technicals continue to improve.

ABBV shares are trading well within a regression channel that dates back to its IPO and identified $60 as a level to buy the shares in June, a move that would have already resulted in 7% gains. This same regression channel identifies an intermediate-term target price of $72 based on Monday’s close.

Shares of AbbVie have been benefiting from support from their 50-day moving average, which has been trending higher. ABBV stock is more than two times likely to continue moving higher on a daily basis when the 50-day is trending higher.

We don’t normally talk about short interest in the Big Chart pieces, but the current short interest ratio of 8.7 on ABBV suggests that the next few days will be fueled by shorts covering their losing positions.  This short squeeze should help Abbvie shares break towards and above $66 on their way to a target of $72.

Gilead Sciences, Inc. (GILD)

Gilead Sciences, Inc. (GILD)
Source: Chart courtesy of StockCharts.com

Gilead shares closed out after-hours trading just above $85 as the company’s earnings results were better than Wall Street expectations, but included an outlook that lowered sales guidance for the 2016 fiscal year.

From a technical perspective, the $85 level offers potential support as it is the site where the stock’s 20- and 50-day moving averages converge. The confluence of trendlines should provide some support; however, the stock also has back-up support at the $80 level from the technical phenomenon of round-number support (yes, it exists) and a little known technical/options factor.

The $80 level is the site of a large amount of put open interest on GILD. Historically, large amounts of put open interest tend to act as a technical/mechanical support level due to the hedging that is involved with those traders that have sold these options.

The technicals suggest that a short-term trading opportunity exists for Gilead shares, as they are likely to find another bottom at the $80 level and then rebound back to $92 over the intermediate-term.

Sprint Corp (S)

Sprint Corp (S)
Source: Chart courtesy of StockCharts.com

Sprint shocked the market with a great earnings report along with some great subscriber forecasts.  S stock trades 27% higher during the session, leaving traders asking if there’s any meat left on the bone in terms of upside performance. The answer is yes.

S stock shot higher yesterday, but has additional room to move to the $7 level before hitting some selling pressure. The key here is the company’s comments regarding subscriber growth, low cap-ex and the potential for acquisition. The trifecta of fundamental drivers validates the fact that the stock has, and is likely to continue making “six sigma” moves.

Don’t get it wrong, we’re likely to see some profit taking on Sprint shares over the short-run. This profit taking will be limited to the $5.50 price mark, which will then act as another launching pad for Sprint stock.

Our technical models suggest a $7 price target over the next two months as Sprint continues to benefit from positive fundamentals and the rest of the market starts trying to catch-up to its trend.

As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/07/3-big-stock-charts-for-tuesday-abbvie-inc-abbv-gilead-sciences-inc-gild-and-sprint-corp-s/.

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