Post-earnings trade setups: Alphabet, Bellway and Expedia

After a week where earnings reports and trading statements helped dictate market sentiment, Alphabet, Bellway and Expedia provide us with interesting trading setups for the weeks ahead.

Bellway Source: Bloomberg

This article takes a look at some of the big movers, off the back of recent earnings announcements, to try and find stocks that seem to provide a good trading opportunity. Typically, earnings announcements will drive a shift in market sentiment, allowing for a long-lasting trend to take hold of the back of the announcement. However, we also can see earnings figures drive a stock into particular reversal points, once again providing us with an opportunity to fade that initial market move based on technical. As such, the aim is to reflect on the impact of these announcements from a technical perspective rather than a fundamental one. After all, the price is expected to reflect all relevant knowledge currently available.

Alphabet (Google)

The tech earnings have continued apace this week, with Alphabet, Snap, and Twitter all releasing their latest figures. Alphabet was the earliest to report, and unfortunately it has not been a particularly positive week despite early gains on Monday and Tuesday. Monday’s rally took us into both trendline and Fibonacci resistance, following a drop back into the $984.28 low of 2018. The respect of that confluence of resistance, coupled with the fact that we are no longer creating higher lows, points towards a possible scenario where we could see this share fall further from here.

Alphabet weekly chart

Alphabet weekly chart

The daily chart below highlights the breakdown we are seeing towards the second half of the week. The $1066.26 level is going to be key, with a break below there providing a bearish breakdown signal.

Alphabet daily chart

Alphabet daily chart

Bellway

The housebuilders have enjoyed a strong start to 2019, and with the likes of Bellway and Barratt Developments providing a positive outlook in their earnings figures this week, things don’t look so bad, despite the wider feeling of negativity around the housing market. The boost we have seen in the Bellway share price towards the end of the week may be too little too late. The downtrend in place throughout 2018 remains intact unless we see a break through the £30.00 peak from November. With the price having dropped below £28.18 after the completion of a trendline resistance, it looks likely we will see these shares lower once more before long. As such, a bearish outlook remains in play unless we see the £30.00 resistance level broken.

Bellway chart

Bellway chart

Expedia

The Expedia share price has been surging throughout the start of 2019, with the company hitting a four-month high at the end of this week. However, this rally has taken us into a crucial area of resistance, with the November 2018 high coupled with a descending trendline dating back to July 2017. This is a key threshold that needs to be overcome if the company is going to push into a more bullish mindset. Given the importance of that level, we should also note that this could be a crucial turning point for Expedia, with a bearish reversal keeping us within the symmetrical triangle in play. If we do break this resistance level, a rise through the $138.76 mark would be the ultimate signal to say that the uptrend is back in control.

Expedia chart

Expedia chart

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