This morning’s markets are getting a boost from the bevy of positive earnings results that flowed from the large cap technology sector last night. As a result, the Nasdaq 100 is shooting above the $150 mark which will garner the attention of many technical traders and cause more money to flow into this group.
All is not well in the technology world though as company like Qualcomm, Inc. (NASDAQ:QCOM), Snap Inc (NYSE:SNAP) and Tesla Inc (NASDAQ:TSLA) are struggling to hold on to their technical support levels. Should you buy these dips? Let’s dive into that question in today’s Three Big Stock Charts.
Qualcomm, Inc. (QCOM)
Qualcomm will announce its earnings as part of the flood of reports next week. QCOM stock has made a decent rally over the last two weeks in preparation for the announcement, but our experience is that this is likely a “buy the rumor” rally that you’ll want to avoid.
- This week, QCOM stock ran into resistance at its 200-day moving average. This trendline is moving lower, suggesting that the stock is likely to see selling pressure in the absence of a strong report.
- The 50-day moving average of Qualcomm shares remains in neutral territory.
- From a long-term perspective, QCOM stock remains in a bear market trend as it trades below its 20-month and 10-month moving averages. Our analysis suggests that the market will continue to sell into fits of strength like the recent rally and remain bearish.
Snap Inc (SNAP)
Since its IPO earlier this year, SNAP shares have lacked the fundamental story and strength needed to get the chart turned around.
The stock is trading off its lows, below $13; however, the current technical picture is looking like another trip to these lows are likely.
- SNAP will announce their earnings on Nov. 7 after the market close. The last earnings results have resulted in negative reactions that took the stock below key technicals.
- Approaching this announcement, the stock is hovering above $14, which has been clear chart support for the stock. A break below this will trigger a move to $12.
- The 50-day moving average for SNAP shares is looming just above the current prices, trying to shift into a bullish pattern. Keep your eye on $14.80, as traders will see this as a potential catalyst for a rally if shares break above this trend.
Tesla Inc (TSLA)
Tesla will announce its earnings next week on Nov. 1, after the close. Historically, Tesla tends to see a rally ahead of its earnings calls, but TSLA stock is headed the other direction now as we’ve seen downgrades take some of the wind out of the stock’s sails.
Is Tesla a buy ahead of the report?
- From a relative strength basis, TSLA shares have lagged the market and tech stocks meaning that the “smart money” is starting to migrate away from the stock. Selling and volume patterns have been indicating this move, which is not bullish for the stock.
- Tesla stock is now stuck in a volatility sell-off that is targeting a move below $320. A move below this price will break the trading range that Tesla stock has been between since April, causing an increase in selling.
- In addition to breaking the lower trading range price, a break below $320 will move TSLA stock below its 10-month and 200-day moving average. This will be a key technical mark against the stock causing even more selling pressure.
- Our outlook for TSLA shares based on the current technicals targets a move to $260.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.