It is one of the busiest stretches of the profit season.
More than one-fifth of Sow P 500 and 13-component Dow companies will report on their last quarter this week; these benefits range from tech companies like Microsoft to industrial giants like Caterpillar and 3M.
Craig Johnson, Piper Sandler’s chief market technician, says there’s a earnings report that is “the elephant in the room”: Apple.
“It’s a big part of all these indices,” Johnson told CNBC’s “Trading Nation” on Friday. “Apple will be the one to watch and set the tone, just like what you’ve seen with Netflix set the tone with some of these FANG actions.”
Apple, the largest stock exchange listed on the stock exchange, has a weighting of approximately 7% in the S&P 500 weighted by market capitalization. He is scheduled to report on Wednesday afternoon. Analysts surveyed by FactSet forecast 13% growth in profits and 12% in sales in the quarter ended December.
Johnson said Apple is preparing for a technical trigger in case the excitement after earnings boosts higher stocks. He identified a cup and handle pattern that has formed in the charts: a bullish technical sign characterized by a rounded background and a period of consolidation that suggests a pause in action before it is higher again.
Apple isn’t the only high-profile report this week. Danielle Shay, Simpler Trading’s options director, is looking at Tesla’s new S&P 500 component. which also publishes its results Wednesday afternoon.
“Tesla has been absolutely fantastic and exceeds earnings expectations in the last five quarters,” Shay said during the same interview. “I think this is Tesla’s opportunity to show everyone that retailers aren’t wrong on this issue, and if we get a big Tesla pace, I really think it could lead to a pretty strong momentum.”
Shay is targeting $ 1,000 for Tesla shares, 18% more than the current level. Tesla was one of the hottest stocks of 2020, rising more than 1,100% from its low in March.
“However, if that doesn’t come up and we end up seeing Tesla retire, then this will be a great buying opportunity,” Shay said.
Analysts expect Tesla to earn $ 1.04 cents a share during the December quarter, more than double a year earlier. Sales are expected to grow by 43%.
Disclosure: Shay has TSLA.
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