Earnings season is starting to pick up, giving traders plenty of charts to focus on. Let’s look at a few top stock trades reporting their quarterly results.
Top Stock Trades for Tomorrow No. 1: Chipotle (CMG)
Here is a weekly chart of Chipotle Mexican Grill (NYSE:CMG), which is set to report earnings on Tuesday after the close. Right off the bat, there are a few key areas that appear rather obvious.
The first is the 50-week moving average, which was resistance two weeks ago, then reclaimed last week and held as support this week. That’s showing some significance, and bulls will want to see this mark hold this week.
Above the 50-week moving average puts the $850 level in play. This mark was resistance in the first half of 2019 and support in the second half. Look to see if CMG can reclaim this level, putting $900-plus in play.
On the downside, though, Chipotle needs to hold the $725 area. Below that puts the 100-week moving average in play, which has been notable over the years (as highlighted by the blue ovals on the chart). A break of this mark near $650 puts the $550 level and 200-week moving average in play.
Top Stock Trades for Tomorrow No. 2: Lockheed Martin (LMT)
Lockheed Martin (NYSE:LMT) shares are retreating on Tuesday, down about 2% after the company’s quarterly report.
A few weeks ago, the key gap-up level near $400 acted as resistance. This level also happens to be the 78.6% retracement for the 2020 trading range. Below that mark now, LMT is struggling to hold its major moving averages between $370 and $386.
For the moment, it’s clinging to its 61.8% retracement near $373 and the 50-day moving average near $370.
If Lockheed fails to hold up above this area, it puts the $350 mark in play. That also happens to be the 50% retracement for the 2020 range. With LMT stock trading very technically based on its retracement levels, it’s only worth pointing out that the 38.2% retracement is down near $330.
Top Stock Trades for Tomorrow No. 3: Netflix (NFLX)
Last week, the stock broke out over multi-year range resistance between $380 and $385. It didn’t take long for the bulls to get on board, quickly bidding shares up through the prior high near $420.
After surging toward $450, NFLX stock has cooled off a bit but continues to trade north of its prior $420 highs. With earnings on deck for Tuesday, what can we expect out of Netflix?
On a bullish reaction, see if Netflix stock can take out its current highs and more importantly stay above the prior high. If so, it opens up a move toward $500. On a pullback below the prior $420 high, however, see that prior range resistance near $380 holds as support. If it does, this could be an excellent buy-the-dip opportunity.
Top Trades for Tomorrow No. 4: Coca-Cola (KO)
Like Lockheed Martin, Coca-Cola (NYSE:KO) reported earnings before the open on Tuesday. Also like LMT, KO shares are under pressure as a result, down nearly 3%.
The stock struggled to hold the 100-week moving average and prior breakout level at $48. Now in retreat, shares sit at a critical juncture.
Long-term uptrend support (blue line), the 200-week moving average and the 38.2% retracement for the 2020 range all sit in this $44 to $45 area. A break below puts $40 to $42 on the table, while a move below $40 puts the March lows back in play.
If support holds, look to see if KO can reclaim $48 and ultimately climb to the 50-week moving average.