And they’re off! Earnings season is hitting a stride this morning with 17 of the S&P 500 companies dropping their quarterly results on the market today. In addition, we’re seeing some volatility in stocks from the never-ending Brexit headlines, but the story of the day will still be earnings when the dust clears.
Wit that in mind, today’s three big stock charts dive into the movement of Goldman Sachs Group Inc (NYSE:GS), Johnson & Johnson (NYSE:JNJ) and Progressive Corp (NYSE:PGR) as their pre-market earnings releases have the technical charts making some noteworthy moves.
Goldman Sachs Group Inc (GS)
The financial stocks are coming up with a mixed earnings season so far as it has been hit-or-miss, but Goldman dropped a miss on the market this morning and GS stock is paying the price.
Goldman shares are trading 4% lower on the earnings release. The quick drop is troubling for a few reasons.
First, the trend of the 50-day moving average was already rolling over. Now, the move is going to start accelerating, adding some pressure to GS over the intermediate-term outlook. Second, the stock broke the $220-level, a key level that traders have been defending. Third, Goldman broke the lower Bollinger Band, accelerating the selling pressure on the stock.
For now, traders should target the short side with a target of $200 for GS.
Johnson & Johnson (JNJ)
Johnson & Johnson shares are trading lower this morning after the company’s earnings report revealed that it had missed earnings revenue targets.
JNJ stock has seen a bit of a “buy the rumor” rally ahead of this morning’s announcement, breaking back above the technically sensitive $125-level. That price was surrendered quickly with Johnson & Johnson shares now trading below $122.
The move below $122 takes the company back below its 50-day moving average, which is lending to the increase in trading volume this morning. From a short-term perspective, traders will want to see JNJ stock hold this level in order to confirm that the stock is a “buy the dip” candidate.
Johnson & Johnson shares also broke below their lower Bollinger Band this morning, suggesting that we may see an increase in the volatility trade. The lower band level sits right at the 50-day for JNJ stock, at $122.75.
The “buy the dip scenario gets stronger as Johnson & Johnson shares’ RSI reading slumped to an oversold reading on this morning’s weakness. This is the first time that we’ve seen the RSI reach this low of a level since the last earnings report, and right before an attractive “buy the dip” that saw shares rally more than 10% in a month.