Earnings season is a crucial time for investors and analysts, as it provides insights into how well companies have performed over the past quarter and gives indications of their future earnings. In 2023, expectations for US Q1 earnings were low due to economic challenges and rising interest rates. Surprisingly, many companies beat these low expectations, with 75% of S&P 500 companies surpassing forecasts.
Risk Assets Ahead of Rally: What to Buy?
2022-08-12 • Updated
US100 broke through the strong resistance trendline, following July's inflation numbers on Wednesday, which were less than analysts expected. The expectations of an upcoming inflation decrease and the fact that, despite the Federal Reserve's aggressive interest rate increases, companies remain profitable, and the jobs market is still in good shape helped to improve investors' sentiment.
Moreover, on Thursday, the Producer Price Index (PPI) also confirmed possible cooling of inflation, as numbers underperformed the forecasts.
The NASDAQ 100 (US100) is a capitalization-weighted index, which includes companies from major industry groups, such as computer hardware/software, retail/wholesale trade, biotechnology, and telecommunications.
Usually, investors treat these companies as risky investments as many have low revenue relative to debt. Therefore, this index is the main indicator of the traders' and investors' risk sentiment.
US100 breakout on the D1 timeframe
What to trade?
If US100 doesn’t return under the trendline by the end of the week, traders might consider buy trades with the target at 14 000.
CCL, Daily chart
Although the stock of Carnival Corporation isn't included in US100, the overall stock market growth might boost CCL. The price has formed a triple bottom pattern with the resistance at $11.10. Traders should consider buying the stock after the breakout of this level, with the target at $13.35 (21% potential profit).
AMD, weekly chart
The price has formed a double bottom inside of the bullish wedge. The wedge breakout has already happened, highlighting the possibility of an upcoming pump. Traders should consider buying AMD stock after the price breaks above $110.00, with the target at $135.00.
COIN broke out of the horizontal consolidation, and currently, the price is retesting the breakout from above. If buyers hold the $80.00 support, they will have all chances to push the stock to $155.00.
Nvidia is consolidating between 163.00 and 193.00. Currently, the price is forming an inverted head-and-shoulders pattern. The breakout of 193.00 resistance will confirm the pattern and set the target at 230.00.
If the price goes below 163.00, it will go towards 145.00.
Tesla, daily chart
Tesla stock is trading inside the inverted falling wedge, which usually works as a bullish pattern. If the price breaks above 935.00, traders should consider following the trend with the target at 1040.00. Trade declines if the price falls below 825.00.
Apple, weekly chart
Apple stock also moves inside an inverted falling wedge. The rally will start after the breakout of the wedge’s upper border. In this case, the first targets will be 182.00 and 212.00.
If the price doesn’t break the resistance, it will decline to 155.00.
Do you want to get updates Live? Subscribe to the @FBSAnalytics Telegram Channel where I post more daily trade ideas!
When I started trading stocks a few years ago, I often needed to pay more attention to my technical analysis skills and trust that the market would play fair according to my analysis. I have since discovered that the safer approach to trading stocks is to, more often than not, seek out investing opportunities - that is, catching stock commodities with a potential to rise.
The S&P 500 had a good week due to the impressive start of Q1 earnings and favorable inflation data. In March, the consumer price index rose 5%, lower than the previous month's 6%, and met economists' expectations.
On Friday, the gold price (XAUUSD) retreated from a recent two-week high, facing selling pressure. This decline was driven by hawkish minutes from the FOMC meeting, indicating the Fed's reluctance to cut interest rates. Elevated US Treasury bond yields, supported by a "higher-for-longer" narrative, further weakened demand for gold...
Bearish Scenario: Selling below 22.65 with TP1: 22.34 (intraday) and TP2: 22.02 (swing). Bullish Scenario: Buying above 22.70 with TP1: 22.90.
Intraday and swing scenarios based on price action and volume profile.