3 Big Stock Charts for Wednesday – DIS INTC V

Advertisement

Knowing when to get out of a stock when it is rallying is more than half of the battle of making money in the market. The stakes get higher during earnings season, which is why our eyes are on Intel Corporation (NASDAQ:INTC), Walt Disney Co (NYSE:DIS) and Visa Inc (NYSE:V) ahead of their upcoming earnings announcements.

Here’s a look at each:

Intel Corporation (INTC)

160720 INTC Price Chart
Source: Chart courtesy of StockCharts.com

First, we look at INTC, which will trade after today’s bell. The semiconductor used to own the industry, but now it’s spread among a number of competitors. Technically, the price of Intel stock reflects this as it struggles to get relative strength against its peer companies.

Intel shares are trading at $35 today, the top of their range that dates back to December. The shares have not been affected well by earnings over the last two years, averaging a small 0.87% loss on the day following its reports. This might serve as a catalyst for techies to sell on any bad news.

The short-term rally has shot Intel shares’ Relative Strength Index reading well into overbought territory, which should concern traders as it sets up a “buy the rumor, sell the news” situation.  In other words, INTC appears to be prices for earnings results perfection — something that often bodes poorly for a company.

Over the long-term, Intel has spent very little time above the $35 level since 2014, though it has tried on a number of occasions  In other words, $35 is the line in the sand that INTC stock just doesn’t want to cross. Be wary of this resistance today.

Walt Disney Co (DIS)

160720 DIS Price Chart
Source: Chart courtesy of StockCharts.com

DIS shares are falling into a familiar pattern as the stock starts to sink below the median of its trading bands that date back to the stock’s bearish reversal in August 2015. This trendline lies at the $97.50 mark.

The last significant break of this trendline was — you guessed it — after Disney’s last earnings report in May. After the trendline gave way in May, DIS stock plunged from $104 to $97 before getting a little support from the analyst community with some upgrades.

Today, Disney stock has moved back below its declining 50-day moving average, which in and of itself is a bearish signal that the stock’s intermediate-term trend is shifting back into bear mode. A move back below the $97.50 mark will get the attention of technical sellers, likely adding more pressure.

Visa Inc (V)

160720 V Price Chart
Source: Chart courtesy of StockCharts.com

Visa shares have followed the “random walk” to nowhere over the last eight months as the stock has not been able to break its rangebound trading. Now, from the shorter-term perspective, V stock is providing a bearish pattern worth noting.

Since April, Visa’s stock price has been drawing a pattern of lower highs and lower lows, which is often a precursor to a longer-term shift in price trend. Right now, the 200-day moving average has been the stock’s savior as it has maintained support, but the next challenge may be a bit tougher.

Visa shares’ 50-day moving average has been rolling over into a declining pattern. Our historical data shows that this increases the odds to a 2-to-1 chance that the day-to-day price changes will be declines. The last time that we saw a dramatic rollover in the 50-day on Visa was when it dropped from $78 to $68 earlier this year. A trend reversal along with lower highs and lows means that traders should take note before earnings tomorrow, July 21.

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

More From InvestorPlace


Article printed from InvestorPlace Media, https://investorplace.com/2016/07/dis-intc-v-big-stock-charts-wednesday/.

©2024 InvestorPlace Media, LLC