As we’ve pointed out time and time again, the earnings season can take away as quickly as it gives, which is why ConocoPhillips (NYSE:COP), Western Digital Corp (NASDAQ:WDC) and Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) are on our list of three big stock charts today.
Last week, these companies were positively affected by earnings announcements as these three companies performed in the top 20 stocks (Top 20 listed below). These three were earnings-related moves as they bested earnings and or outlooks. Today’s we will look at whether these earnings winners are one-trick ponies that should be sold or something to hold on to for higher prices.
| Symbol | Name | Sector | 10/21/2016 | 10/28/2016 | Percent Change |
| AKAM | Akamai Technologies Inc | Information Technology | 57.67 | 69.91 | 21.2% |
| LVLT | Level 3 Communications | Telecommunications Services | 47.14 | 54.05 | 14.7% |
| FFIV | F5 Networks | Information Technology | 118.07 | 134.66 | 14.1% |
| JNPR | Juniper Networks | Information Technology | 23.13 | 26.2 | 13.3% |
| BHI | Baker Hughes Inc | Energy | 52.35 | 59.12 | 12.9% |
| FLIR | FLIR Systems | Industrials | 28.97 | 32.69 | 12.8% |
| ALXN | Alexion Pharmaceuticals | Health Care | 120.26 | 135.59 | 12.7% |
| OI | Owens-Illinois Inc | Materials | 17.24 | 19.31 | 12.0% |
| WDC | Western Digital | Information Technology | 53.07 | 59.21 | 11.6% |
| FCX | Freeport-McMoran Cp & Gld | Materials | 10.04 | 10.93 | 8.9% |
| COP | ConocoPhillips | Energy | 41.54 | 44.97 | 8.3% |
| KEY | KeyCorp | Financials | 13.04 | 14.07 | 7.9% |
| CTL | CenturyLink Inc | Telecommunications Services | 28.21 | 30.39 | 7.7% |
| EMN | Eastman Chemical | Materials | 66.87 | 71.99 | 7.7% |
| LMT | Lockheed Martin Corp. | Industrials | 230.52 | 248 | 7.6% |
| HSY | The Hershey Company | Consumer Staples | 95.36 | 102.4 | 7.4% |
| RCL | Royal Caribbean Cruises Ltd | Consumer Discretionary | 69.37 | 74.47 | 7.4% |
| MDLZ | Mondelez International | Consumer Staples | 42.21 | 45.2 | 7.1% |
| R | Ryder System | Industrials | 64.43 | 68.94 | 7.0% |
| SRCL | Stericycle Inc | Industrials | 74.78 | 79.73 | 6.6% |
ConocoPhillips (COP)
ConocoPhillips got a boost from its quarterly earnings results that showed the company lost less than Wall Street analysts had expected. The earnings news resulted in a near 10% rally in COP shares from significant trendline support as the stock was already in the process of forming a new intermediate-term bullish trend.
The earnings news, along with firming prices in the crude oil fields has improved the outlook for ConocoPhillips shares as the stock is benefiting from extremely long-term trendline support to give it some headway.
COP shares bounced from their 200-month (that’s right I said 200-month) moving average recently. The reason that we would even pay attention to a moving average this long is because it identifies cycles in a market such as crude oil. The same trendline came into play in 2009 as ConocoPhillips put in a long-term bottom that saw shares rally from $27 to $42 in relatively short order.
The next two days will give us an indication of the speed at which COP shares will rally over the next month.
Currently, ConocoPhillips shares are at the top of their Bollinger Band range. A break higher will trigger more volume buying and put the stock into a bit of technical hyperdrive. If COP shares take a rest, we will watch the $44-level for support and a buying opportunity. Otherwise, a move above $45 will signal that the shares are likely to maintain their parabolic move.
Alexion Pharmaceuticals, Inc. (ALXN)
Alexion Pharmaceuticals shares saw a 14% gain after their earnings announcement. ALXN is one of the few biotechnology companies that have been able to please Wall Street so far this earnings season. However, the pleasing of the Street is less likely to please the technical analysts as Alexion Pharmaceuticals has run into technical pressure that is going to keep the shares on an intermediate-term bearing trajectory.
The two-day average shot higher has resulted in an instant overbought situation for ALXN shares as the RSI for the stock is trading well above the $70-level that signals potential selling on the horizon. The selling will come at a time when shares of Alexion are finding themselves testing the 200-day moving average, a trendline that has been staunch resistance.
The pattern of lower highs and lower lows indicates that ALXN stock is more than likely to experience some selling pressure after the buzz surrounding its earnings announcement wears off. Traders will be well served to bag their profits now and move on to the next opportunity.
Western Digital Corp (WDC)
The technology sector is faring well this earnings season, especially with thoughts of mergers and acquisitions going through everyone’s heads. Western Digital Corp, nailed the earnings announcement last week, engaging a parabolic move that is likely to continue.
WDC shares have stalled at the $60-level initially, as this price has some history for the shares, acting as resistance in September. Now, with additional momentum and a few upgrades, the next move for Western Digital should be a break above this round-numbered resistance level, which will cause WDC stock to continue its aggressive move higher.
Western Digital shares are also benefiting from a shift in their major trendlines from neutral to bullish conditions. Over the last month, the 50-, 100- and 200-day moving averages for WDC have transitioned into bullish ascents, indicating that the stock will have support on any pullbacks. This offers technical buyers a chance to “buy the dips” as this company move higher.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
