However, their price action is setting up similarly going into earnings even though their technical pattern is different.
Here's ISRG:
Lessons to be learned and a preview of what to expect:
- W pattern formation, which meant a selloff was very likely going into earnings despite massive beat
- "Double top" pattern that formed
- It has now definitively broken its 6 month 50DMA
- This stock will most likely return to the 200DMA support ~$267 before rebounding.
Hang tight ISRG holders. This one could retrace all the way to the low 270's before rebounding and will still maintain in line with its bullish 2 year uptrend. If the stock does get this low, I will most likely jump on for a trade as well. But for now with the intensity of the selloff I feel my money could be put to better use elsewhere for now. My condolences to ISRG long speculators and marginal holders.
Apple - The tech darling of wall street
Let me be first to say I OWN THIS STOCK. And even though it breaks my heart to talk against it I gotta keep it real and follow the charts. Apple is set to report on 4/23. No doubt with the blowout earnings of Google today tech is going to have huge momentum carrying it forward. And no doubt there are going to be tons of euphoric buyers piling into the stock. Even though the stock swooned bigtime during January - March, note:
- Indicators are already near max out
- Just like Intuitive Surgical, it has made a huge move up, retraced to 20DMA, and now is chugging along once again. Now it is WELL ABOVE any support lines. (First line of support rest @ roughly 150
- BUT, notice once again the "necktie" that is forming underneath with the 20DMA and the 200DMA ($150). THIS SHOULD BE VERY VERY STRONG SUPPORT.
I would imagine in the coming days Apple will continue to make its climb up, perhaps even as high as $170 (just my guess). But note that if apple reaches 170 into earnings, it will already be EXPECTED that they blow out estimates BIGTIME. And even then, the upside premium is already factored into the price. If they disappoint. Oh boy hang on to your hats...This leads me to think the stock will swoon to at least its necktie support of $150. That could potentially be a $20 dollar drop if the price reaches $170+ into earnings.
We're going to get some very interesting tells in the coming days. If wall street is pumping this stock like mad, if the psychology of investors goes along the line of "OH YEEE $200+ HERE WE COME!!!", if there's way more calls being bought over puts etc., be prepared for a massive "sell the news" plunge to the necktie level that'll destroy speculators and blind bulls. Remember, whatever the sentiment of a stock is, combined with its price action leading up to earnings, will most likely dictate the OPPOSITE direction the stock will travel afterwards.
We will know more as the day approaches. But just my two cents.
Good luck!
- DL
Disclosure:
Long AAPL, GOOG, GRMN, 25% MOS
Short X
8 comments:
Good analysis, I am learning something from your blog. thanks!
I have been always bullish on Apple.
There is always a lot of expectations/hype going into Apple's earnings and there is usually a run up as well, so how do you know when you should hold through the earnings?
Apple's high was around 200 and so there is still room to run unlike ISRG when it was already near its high before its earnings.
Im a big fan of your new blog and your analysis. I noticed you've pulled back from MOS to 25%, Im wondering what your thoughts are for POT into earnings and the AG sect short term. I dont understand why it hasnt pulled back a bit.
i love the analysis! so in general you would say that if a stock has had a huge run up before earnings, there's minimal upside left? but how do you assess companies that have broken through resistance due to the huge run up? for example, RIG has had a huge run up lately before the earnings coming up; however, couldn't you also argue that's because the stock seems cheap even at this price and the growth prospects are huge for the future? in other words, IF RIG goes up after earnings, how would you relate that to your theory for ISRG? i guess that's the thing with tech analysis, it's seems very 'i told you so' after the data is obtained and you can make a case either way.
annoymous,
remember, the purpose of my blog (as well as my style of trade) is very short. I am a swing trader so I just try to profit from potential moves based on the analysis. And although I do agree technical analysis seems to be a presentation of historical data, utilizing the stats to our advantage could help us "somewhat" hypothesize the movement of the stock in the near future. It's no guarantee of course because there are many other factors involved in trades. But it would be foolish to believe TA does absolutely nothing in terms of predicting the near term movements of a stock. For me, when I study a chart during a live trading sessions, the stock's price movement, volume, and the time it takes for the movement to occur is the most important.
As for Rig I have to look into it, stay tuned. And good luck tomorrow
But I do agree with you. This is why I try to predict the moves before they happen. Screw those media buffoons who constantly raves about how "smart" they are calling a stock after it moves. WTF is the point of that? We don't need meteorologists that tells us the weather from the past week. We need ones that'll tell us whats gonna happen tomorrow. That I completely agree with you on. This is why one useful method I have found from trading CNBC media news and those media clowns is to do the opposite of what they say. Because by the time they pronounce a move, the move has already been made.
i sold all my DNR ON gap up today
for $555 gain in 2 days
i got buy on friday and sold today monday
48 hr gain how nice
xman i wait long stocks
till put /call hit 1.04- 1.10
i also use this with my techicals
i tells me if a ton fool bulls or fool bears
i can read there mind set people
greed and fear
when greed high you sell or short
when fear in you BUY BUY BUY 3X
right in market from friday and today there greed we will now pull back 2day-5days
cause greed in time sell to greed fools
does your AAPL pattern look like a cup and handle?...theoretically you'd buy after the dip in the handle ('shakeout') and once you break the top of the handle...approx $155. however, now i'm scared about your theory on the run up due to earnings...would you be weary of patterns during earnings time?
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