Studying stock charts is important, but monitoring the financial news can give traders an extra edge. Combining technicals and fundamentals is a great way to get a complete picture of how a company is doing.
When you’re watching for news items on a specific company, earnings reports are of vital interest. For one thing, earnings releases provide data on whether a company is profitable or not. Moreover, earnings announcements can impact stock charts because large price movements sometimes ensue.
Since earnings season is now under way, this is an ideal time to watch how the market reacts to the data. Today we will take a close look at three big stock charts featuring names that recently published their earnings announcements.
American Express (AXP)
Credit-card giant American Express (NYSE:AXP) is a well known component of the Dow Jones Industrial Average index. Thus, Friday morning was filled with anticipation as the company announced the results for its first-quarter earnings.
Analysts were expecting adjusted profits of $1.46 per share, but American Express actually generated $1.98 a share, thereby “beating the street,” so to speak. However, quarterly revenues came in at $10.3 billion, underperforming the expectation of $10.7 billion. Let’s see how the trading community reacted to these developments.
- Friday’s candlestick is what’s known as a hammer. This is bullish because the bears attempted to push the price down but didn’t succeed.
- As you can see, AXP stock is pushing up against the 20-day moving average. That’s a short-term price trend indicator and a “line in the sand” the bulls will want to break through soon.
- There’s moderately strong resistance at the $95 level. Shareholders might consider taking profits at that price point.
Intel’s adjusted earnings came in at $1.45 per share, outdoing the analysts’ projection of $1.28 per share. Meanwhile, the company’s quarterly revenues totaled $19.8 billion, thereby beating the average analyst forecast of $18.67 billion. But did all of this translate to a higher stock price?
- Although it was barely a green close for INTC stock, Friday’s candlestick tells an amazing tale. After a sizable gap down in the morning, the bulls continuously pushed the price up throughout the trading session, defeating the bears in the end. It was a photo finish!
- There is a symmetrical triangle chart formation in effect, though it’s somewhat slanted. The bears attempted a breakdown through the bottom of the triangle, but the bulls pushed the stock right back up.
- The buyers also ensured that INTC stock closed above the 20-, 50-, and 200-day moving averages. This is all quite bulllish.
The good news is that Verizon’s quarterly adjusted earnings per share came in at $1.26, beating the analyst consensus estimate of $1.22 per share. The bad news is that the company’s operating revenues totaled $31.6 billion, which was less than the average analyst forecast of $32.4 billion. With all of that in mind, we can now find out whether the chart reveals any noteworthy developments.
- Much like INTC stock, we see an impressive recovery on Friday with VZ stock. The hammer candlestick suggests that the buyers are fully in control here.
- The bears’ threat to break below the 20-day moving average failed on Friday. Now, the bulls want to bring the stock above the 200-day moving average.
- All in all, the recovery from the March low of around $49 has been powerful. It’s a compelling argument that VZ stock could easily march higher from here.
As of this writing, David Moadel did not hold a position in any of the aforementioned securities.