We’re heading into one of the largest weeks of earnings announcements this week as 185 of the S&P 500 companies will provide their quarterly profit results to the Street. The increased number of reports means that traders will be busy and the charts are providing all kinds of opportunities from the charts.
Today’s three big stock charts look at Hasbro, Inc. (NASDAQ:HAS), Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) and Halliburton Company (NYSE:HAL) as three companies that the traders are watching the charts of closely.
Hasbro, Inc. (HAS)
Hasbro shares are trading 8% lower this morning after beating analyst expectations for their earnings results. HAS stock is trading lower since expectations were high heading into the report, creating a “sell the news” reaction.
While the decline looks bad for the toymaker, the charts indicate that this is an opportunity to buy the dip.
- Hasbro stock has been trading in a bullish pattern since January as the 50-day moving average remains in a strong uptrend. This should help Hasbro stock regain some strength as the short-term sellers begin to tire.
- The 100-day moving average for HAS shares is trending higher and resides at the $103.50-level. This is the level where we are likely to see support start to kick in and the buyers start supporting the stock.
- Today’s move takes Hasbro shares near an oversold reading from its RSI. A Buy signal from the RSI while the stock is testing the 100-day will combine for double support for the stock, and a likely short-term tradable bottom in this market leading stock.
Alphabet Inc (GOOGL)
The internet giant will report its results after the close today and traders have been bidding the stock higher.
As it stands now, it appears that the “rumor buyers” have spent some serious capital pushing the stock to the $1,000 level, which is likely to result in a “sell the news” situation for Alphabet shares.
- Two of the last three earnings results have seen GOOGL stock pullback on a “sell the news” move by 5% and 8%. In both cases, the stock had run-up to chart resistance just ahead of the earnings release as we are seeing now.
- The $1,000-level is clear resistance for Alphabet stock. This is the same level that the stock tripped over itself at in June. The reason for this is mostly psychological as investors and traders tend to make buying and selling decisions using numbers that end in more zeros.
- A reasonable “sell the news” routing will take GOOGL shares to the $960-price, which would represent a 4% decline and offer support from the bullish 50-day moving average. Watch for traders to start supporting the stock at this level.
Halliburton Company (HAL)
Halliburton stock has been in a strong bearish trend and this morning’s earnings results didn’t help break the cycle. While the company did beat earnings, the company referred to the U.S. market as “tapping the brakes” in talking about its outlook and demand.
The energy sector has been the sector that analysts have expected to see the most year-over-year growth for this quarter, but the outlooks are clearly more important to investors at this point. HAL remains on that list of stocks that we are avoiding based on the poor charts.
- After moving above their 50-day moving average for a short period of time, Halliburton shares have broken back below this critical trendline. The 50-day moving average is also trending lower, suggesting that HAL will maintain a bearish intermediate-term outlook.
- Overhead, the 200-day moving average for Halliburton is beginning to transition into a long-term bearish pattern as it rolls-over into a declining pattern. This will put more long-term pressure on prices.
- Also on the long-term front, HAL shares are failing to break above their 20-month moving average. This is the technical line of demarcation between a bull and bear market for a stock. Halliburton’s move back below this trendline puts the shares back in a bear market trend that will have long-term investors selling on any strength.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
