Our Head of North American Research, Gary Christie gives us a look at some potential earnings movers for the week of Aug 12th.
On a daily chart, the S&P 500 remains bearish below key resistance at 2950. The uptrend from the start of 2019 has been broken. Prices remain below the 50-day moving average, a bearish signal. The volatility breakout which occurred last Monday calls for a choppy price action. Thus, as long as 2950 is resistance, a down move towards 2820 remains likely.
On a longer term weekly chart, the S&P 500 failed to confirm the breakout of a long term broadening wedge continuation pattern. As long as prices remain below record highs we anticipate a consolidation between 3029 and 2610 with the possibility of a strong sell-off towards 2400.
The VIX remains bullish above 16.75 as the S&P 500 remains bearish. The RSI indicates a possible move higher towards 21.5 as volatility remains elevated.
Here are some stocks on our radar this week ahead of earnings.
On Wednesday, Agilent Technologies (A) is anticipated to release 3Q adj. EPS of $0.72 vs. $0.67 last year on revenues of $1.2B compared to $1.2B in the prior year. In other news, the Co was downgraded to "neutral" from "buy" at Bank of America. Technically speaking, the RSI is below its neutrality area at 50. The MACD is below its signal line and negative. The configuration is negative. Moreover, the share stands below its 20 and 50 day MA (respectively at 69.7 and 70.67). We anticipate downside towards $61.9. An ideal stop loss is set at $69.4.
Also on Wednesday, Cisco Systems (CSCO) is likely to unveil 4Q adj. EPS of $0.82 vs. $0.7 last year on revenues of $13.4B up from $12.8B a year earlier. The Co was upgraded to "buy" from "neutral" at Bank of America. From a chartist point of view, the RSI is below its neutrality area at 50. The MACD is below its signal line and negative. The configuration is negative. Moreover, the share stands below its 20 and 50 day MA (respectively at 55.93 and 55.77). We expect further downside towards $49.2 with a stop loss at $54.9.
On Thursday, Wal-mart (WMT) is awaited to post 2Q adj. EPS of $1.22 vs. $1.29 last year on revenues of $130B compared with $128B in the priory year. From a technical point of view, the RSI is below its neutrality area at 50. The MACD is negative and below its signal line. The configuration is negative. Moreover, the stock is trading under both its 20 and 50 day MA (respectively at 112.16 and 109.76). We expect further decline towards $101.4. An ideal stop loss is set at $109.8.
Also on Thursday, Nvidia (NVDA) is expected to announce 2Q adj. EPS of $1.14 vs. $1.94 last year on revenues of $2.5B up from $3.1B the previous year. In other news, the Co was under pressure on news that the U.S. - China trade war was heating up. Looking at a short-term chart, the RSI is below its neutrality area at 50. The MACD is below its signal line and positive. The MACD must penetrate its zero line to expect further downside. Moreover, the stock is trading under both its 20 and 50 day MA (respectively at 168.2 and 157.39). Finally, Nvidia is trading below its lower daily Bollinger band (standing at 154.39). We expect further downside towards $132.1 with a stop-loss at $161.5.
Happy Trading.
