With almost 50 companies reporting within a 24 hour period, we knew there was going to be some volatility. This morning’s three big stock charts zooms in on the good and bad of the reports over the last 12 hours as we look at Twitter Inc (NYSE:TWTR), United States Steel Corporation (NYSE:X) and Seagate Technology PLC (NASDAQ:STX) and the charts after dropping their earnings results on the market.
United States Steel Corporation (X)
Steel companies rebounded during the Trump rally, now they’re paying the price of higher expectations as they enter the earnings confessional.
U.S. Steel is learning this harsh fact this morning with X shares trading almost 20% lower after their results showed a loss of $0.83, an entire $1.18 less than the expectations set by Wall Street. The stock missed the top-line revenue number as well.
The analysts are also buzzing a bit about the company’s switch of accounting methods regarding depreciation. Put simply, nobody likes it when you start changing the way that you do your books, even if its warranted.
Looking at the chart for X, this morning’s move will slice through the 200-day while likely putting direct pressure on its 20-month moving average.
Currently, the 20-month trendline is sitting at $20.29 and should be considered a “must hold” by the technical community. A break below this level will send U.S. Steel stock back into a long-term bear market. The last time this happened was in late 2014 before X dropped from $25 to $7.50 within a year.
Seagate Technology PLC (STX)
Seagate hit its bottom line earnings number this morning, but missed its revenue target. STX is in the middle of the conference call, as of this writing, which should shine light on their outlook.
Seagate shares rose heading into the earnings announcement, rallying almost 6% over the last week. The move signaled a “buy the rumor” rally that may have to do with the selling pressure. However, as of this writing, STX shares have since dropped more than 16.6%.
The chart identifies $44.40 as support for the stock as this was a consolidation level in March that built support. The 100-day moving average for STX is slightly lower than that at $43.81. The combination of these two technicals should help to lend support to Seagate shares today.
The stock will be working out of an overbought signal that hit yesterday. A break below the $44-level without buying may indicate that the bulls are ready to take more profits from the stock over the short-term, which would target a $40 price for the next level of support.
Twitter Inc (TWTR)
Twitter shares are getting a boost of almost 10% after the social media company beat on the top and bottom line by nice margins. The quarter represents another in a long line of volatile fundamental results as the company continues to tweak its business.
Technically, this morning’s gap higher will move TWTR stock above the 50-day trendline, which has been trending lower. The move is more likely to be looked at as a shorting opportunity than anything else as the stock’s previous earnings gaps have been used as such.
The 100-day moving average for Twitter sits at $16.32, which will be widely watched today, especially as the stock instantly moves into steep overbought territory.
From a long-term perspective, it is hard to maintain a bullish outlook on TWTR stock when looking at the monthly charts. Both the 10- and 20-month moving averages are overhead to provide pressure as the stock continues to post a long string of lower highs and lower lows.
For now, watch the profit-takers on Twitter shares as the stock hits these overbought readings. A reversal in the next few days at $16.50 will signal that they (profit takers) are going to move TWTR lower. A break above will open up the path to $18 over the short-term.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
