Post-earnings trade setups: Microsoft, Apple and TalkTalk
After a week where earnings reports and trading statements helped dictate market sentiment, Microsoft, Apple and TalkTalk provide us with interesting trading setups for the weeks ahead.
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 off the back of the announcement. However, we can also see earnings figures drive a stock into particular reversal points, once again providing us with an opportunity to trade that initial market move based on technicals. 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.
Microsoft shares have been declining this week, with Wednesday’s earnings report clearly doing little to reverse the wider downtrend in play since the fourth quarter (Q4) of 2018. This second consecutive week of downside points towards the wider bearish picture coming back into prominence, as the firm gives back more ground after years of outperformance. This points towards another leg lower from here, with a break through the prior peak of 11,409 to negate this bearish outlook. This wider picture allows us to show the existence of the ascending trendline, with that support line providing a notable area to watch for should we see further downside come into play.
Apple shares have turned sharply higher this week, following on from what looks like a period of base building over the past month. The Q4 sell-off took the tech giant down below the crucial 14,865 swing low, yet that move failed to last. Instead we have seen the share price rally sharply, indicating a likely period of bullish sentiment coming into play. As such, this looks like a good time to buy Apple shares, with improved sentiment around the company’s earnings coupled with gradual signs of improvement in relations between the US and China.
TalkTalk has had a torrid time of it over the past three years, with the price currently 73% off the 2015 high of 387. Interestingly, this week’s earnings have done little to change that bearish rhetoric, instead sending the share price down towards a critical level of support. The 86-100 zone provides a critical area, which has always been respected since the company was listed as a single entity back in 2010. With that in mind, a break below this zone could bring about a fall into no-man’s land for the share price.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets