The holiday shortened trading week should prove to be boring for most traders and investors as volume dies-off and the movements in stocks become less volatile. Nonetheless, we’re always looking for the opportunities for movement in any market using the charts and events to trade.
Earnings season continues to see a few reports drip in at the end of the season, which will continue to provide trade fodder on stocks like Tyson Foods, Inc. (NYSE:TSN). Also on our radar for the week is Tiffany & Co. (NYSE:TIF) as the retailer climbs out of a technical crater. Finally, fan favorite Apple Inc. (NASDAQ:AAPL) is starting to draw a pattern that the bulls may not like.
Tyson Foods, Inc. (TSN)
Tyson announced quarterly results that fell short of the market’s expectations this morning. Reaction to the news has TSN shares trading more than 15% off Friday’s close and it has resulted in a technical failure that is going to cost the stock some more value.
Ahead of the announcement, Tyson stock was trading just above its 200-day moving average, which had been trying to hold the shares up for another rally. The decisive move below the 200-day trendline, which has been supporting of TSN’s rally for more than three years.
The length of time this trendline has held Tyson shares from a selloff will mean that technical traders are more likely to react to its breach, which means more selling potential.
In addition to the break of the 200-day, TSN shares are set to immediately challenge chart support at the $60 level. This represents the June 2016 lows, which were a strong rally bottom that traders will look to for a sign of life.
Failure for Tyson shares to move back above the $60 mark within a short period will result in another wave of sellers hitting the market. One thing that TSN does have going for it is that there was an 18% increase in short interest ahead of the announcement.
The short sellers will be looking to close their profitable trades on Tyson and must enter the market as buyers to do so. This buying could spark a short-term rally, but any rally should been viewed as an opportunity to avoid further declines in TSN stock.
Tiffany & Co. (TIF)
Retailers have been turning a bit of a corner and building some bullish momentum. This includes high-end jeweler Tiffany. Improved performance and pricing has the analysts moving to upgrade TIF shares ahead of their Nov. 29 earnings announcement.
The company has seen some tepid earnings results over the last few quarters, so we’re waiting to see about the long-term prospects for Tiffany shares until after the report.
The technical picture is stronger. After being charged by and upgrade and merger and acquisition rumors, TIF shares touched-up on the $82 price point and quickly retreated. With the shares’ 50- and 200-day trendlines moving higher below the stock, there is good reason to believe that the intermediate-term outlook will remain bullish.
Support for Tiffany at the $73 level is strong after a recent consolidation at that price, indicating that the downside potential for the upcoming earnings announcement is smaller than the potential move to the upside.
A positive earnings result for TIF will break through the resistance at $82 and target a move towards $90, while an earnings miss next week would likely be met by support and a retest of the $73 price followed by another round of bullish buying.
Apple Inc. (AAPL)
Apple is on our radar this morning for a few reasons. First, rumors and stories that suggest that iPhone sales have peaked. This isn’t really news to most people as it is apparent that AAPL’s iPhone market is being challenged due to a lack of innovation.
More importantly, the chart for Apple is starting to form a very reliable head and shoulders pattern. The AAPL chart below details the two levels that traders should keep an eye on. First, the $110-level, which is the top of the shoulders and where we may see resistance come in on Apple shares.
A break above the $110-level will scramble the pattern and turn AAPL shares back to a bullish course higher. Resistance and failure at the $110-mark will put a break below the “neckline” in play.
The neckline is represented by the $105 price point. This is the line in the sand that could complete the head and shoulders pattern and turn Apple shares bearish. A break below $105 will break the “neck” of AAPL stock and send technical traders into the pits with their sell orders.
At minimum, Apple shares would decline another 5% to the $100-level, which has been strong chart support for the company. Traders and investors should monitor that level closely as a break below $100 will target yet another selloff to the $90-mark again as AAPL continues to slip and slide in a wide range.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
