U.S. equities are dribbling lower on Friday as the run toward three-year resistance near 18,000 on the Dow Jones Industrial Average peters out.
It was fueled by less-bad-than-expected bank earnings, as well as dovish comments from Federal Reserve policymakers.
But with the rest of the Q1 earnings season set to be disappointing, and a critical over-the-weekend Russia-OPEC oil production freeze meeting likely to end without firm commitments, investors are feeling the urge to sell.
Adding to this is the expiration of April options contracts, which tends to result in a rebound in volatility in the days that follow.
As a result, I recommend caution here, with an eye on these seven stocks for possible short-side plays.
Blue-Chip Stocks at Risk: Apple Inc. (AAPL)
The recent launch of a new 4-inch iPhone (the iPhone SE) and a smaller iPad Pro were largely ignored, raising the stakes further for the upcoming iPhone 7 launch later this year. The nagging concern is that the smartphone market is saturated and the company’s innovation cycle has slowed drastically.
Apple will report results on April 25 after the close. Analysts are looking for earnings of $2 per share on revenues of $52 billion.
Stocks at Risk: Intel Corporation (INTC)
Intel Corporation (INTC) shares look ready to drop out of their two-month consolidation range after analysts at Wedbush lowered their price target ahead of earnings (though the firm still maintained an “Outperform” rating). They believe there is little management can say given well-known weak PC sales and negative industry preannouncements.
Intel will report results on April 19 after the close. Analysts are looking for earnings of 48 cents per share on revenues of $13.9 billion.
Stocks at Risk: Facebook Inc (FB)
Facebook Inc (FB) suffered a dramatic up-and-down earlier this week after reports of a drop in Q1 ad spend … which, oddly, was later withdrawn. Deutsche Bank analysts were cautious in a note on April 4, pointing to mixed ad checks amid high expectations and strong sentiment. Ad growth has been fastest on its non-monetized apps including Messenger and WhatsApp.
Facebook will report results on April 27 after the close. Analysts are looking for earnings of 62 cents per share on revenues of $5.25 billion.
Stocks at Risk: Nike Inc (NKE)
Nike Inc (NKE) shares have been in decline since peaking in late November, ending a massive uptrend that started in late 2012 and saw shares more than triple. Shares slumped in response to the last earnings report in March, despite earnings topping expectations. Revenues rose 7.7%, which missed forecasts, and guidance was soft.
Nike isn’t expected to report results until June 23. Analysts currently are looking for earnings of 48 cents per share on revenues of $8.3 billion.
Stocks at Risk: Under Armour Inc (UA)
Under Armour Inc (UA) shares peaked in September and have been in the doldrums since. A tight consolidation range between $42 and $44 has been established, just below the 200-day MA.
Much depends on the company’s success in international markets, with competition heating up ahead of the Summer Olympics in Brazil.
Under Armour will report results on April 21 before the bell. Analysts are looking for 4 cents per share in profits on revenues of just more than $1 billion.
Stocks at Risk: Valero Energy Corporation (VLO)
Oil refiner Valero Energy Corporation (VLO) is suffering as shares drop back below the 50- and 200-day averages after peaking in November. This could cap a long topping pattern going back to early 2015 that could mark the end of an uptrend going all the way back to 2010 that saw shares gain some 380%.
Valero will report results on May 3 before the bell. Analysts are looking for earnings of 80 cents per share on revenues of nearly $14.25 billion.
Stocks at Risk: Harley-Davidson Inc (HOG)
Harley-Davidson Inc (HOG) is on the slide again as the powerful rally out of the January low — which took shares above their 200-day moving average for the first time since 2014, fades. Sentiment remains negative with Wedbush analysts looking for prices to decline to $42 on a disappointing retail showing amid Indian innovation, Japanese promotions and excess availability of used Harley bikes.
The company will report results on April 19 before the bell. Analysts are looking for earnings of $1.30 per share on revenues of $1.5 billion.