Earnings season produces wild moves
After the closing bell on Tuesday, Tesla reported its earnings for the first quarter of 2024. Despite the report showing a 9% YoY decline in total revenue and a staggering 55% YoY drop in net income, along with an increase in operating costs by 37% YoY, shares of the company soared more than 12% in the aftermarket. The price action, however, was not the same for Meta Platforms, which delivered much better results yesterday, with revenue growing by 27% YoY, net income by 117% YoY, and operating costs by 6% YoY; yet, the company’s shares plummeted more than 15% following the announcement.
While trying to wrap our heads around these moves, we would like to point out the double divergence forming on the monthly graph between the price and RSI, shown in Illustration 1.01. In addition to that, we would want to highlight an impending bearish crossover between the 20-day SMA and the 50-day SMA, both of which currently act as crucial resistance levels. If the SPX breaks and maintains ground above them, it will be positive, but if the SPX fails, it will be slightly worrisome. Besides that, another spike in the VIX will also be concerning. Today, there are several important data releases, including jobless claims, GDP growth rate, wholesale inventories, and pending home sales. Furthermore, several big names are reporting their earnings, most notably Alphabet and Microsoft.
Illustration 1.01
Above is the monthly chart of SPX and RSI. Yellow arrows indicate the first and the second divergence between the price and RSI.
Technical analysis gauge
Daily time frame = Bearish
Weekly time frame = Bearish
*The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor or any other entity. Therefore, your own due diligence is highly advised before entering a trade.
While trying to wrap our heads around these moves, we would like to point out the double divergence forming on the monthly graph between the price and RSI, shown in Illustration 1.01. In addition to that, we would want to highlight an impending bearish crossover between the 20-day SMA and the 50-day SMA, both of which currently act as crucial resistance levels. If the SPX breaks and maintains ground above them, it will be positive, but if the SPX fails, it will be slightly worrisome. Besides that, another spike in the VIX will also be concerning. Today, there are several important data releases, including jobless claims, GDP growth rate, wholesale inventories, and pending home sales. Furthermore, several big names are reporting their earnings, most notably Alphabet and Microsoft.
Illustration 1.01
Above is the monthly chart of SPX and RSI. Yellow arrows indicate the first and the second divergence between the price and RSI.
Technical analysis gauge
Daily time frame = Bearish
Weekly time frame = Bearish
*The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor or any other entity. Therefore, your own due diligence is highly advised before entering a trade.
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