S&P Index is traded near the highs, the price is above all the moving averages, active and medium-term trends are still valid. Macro-trend has been valid ever since September 2011.
The season of reports for the second quarter is in its high gear. Banking Sector companies and such tech giants as Google, IBM, Intel and eBay reported the last week.
Google’s report was better than analysis’s expected. Its net income for the second quarter of 2014 has grown for 6% compared to the same period a year before — to $3.42 billion. Shares redirected their movement after the bear channel penetration around $543, and then grown to $600. This report became a greater movement catalyst, as buyers could not hold the price above $597. The next target is $613.
General Electric, the U.S. industrial giant, increased operational profit in the II quarter of this year by 8% to $3.9 billion. Technically the price lies in the triangle. In such a market structure it makes sense to buy the bottom and sell the highs until this uncertainty is resolved, and then the price will give us a clue of its further direction.
JP Morgan Chase
After the JP Morgan Chase report, the triangle was resolved up. The longer the price stays above the key level of $58, which previously acted as resistance, the better. The breaking of $59 may increase the price up to $61.50.
Bank of America
Bank of America shares are the weakest in the sector, as the bank had great loses due to the mortgage crisis of 2008. Now we have something reminding Head&Shoulders pattern with a neckline/support of $15.20, penetration of which may lead to a fall to the next level of $14.40.
Following a great report Goldman Sachs is building an upper base below the resistance level of $171. Penetration of which or consolidation below it may attract more medium-term investors. Their new target would be then $175.60. The support is $169.
Intel raised its sales expectations, which reinforced the excellent report. The company, which is engaged in the production of microchips for PCs, had its fundamental problems, as the market was captured with tablets and wide displayed phones. However, after the new CEO’s arrival, the company has committed itself to the production of chips for mobile devices, thus adapted to the new market conditions. Nevertheless, there is still plenty to do. Consolidation after a big move makes sense, the first visible level of support is about $33.20.
eBay is forming a bear flag after the false breakthrough of the highs of $57-$58 and a fall to $48. It’s related to the company’s request to all of its more than 100 million users to change their passwords cause of the hackers’ attack. The resistance zone is about $52.00-$52.50. I’ll look for some reduction opportunities. Penetration of the flag and the key moving averages around $50.50 is also more likely to lead to a drop in prices.
Apple will report on Tuesday after the market closure. Sales of tablets are falling, according to researches, it’s for the first time after the market appeared. Lack of innovations, that used to be the cause of rapid shares’ growth previously, as well as a big movement from $80 to $97 after the previous report, may limit the potential for further growth. Microsoft also reports on Tuesday after the closure.
Amazon is building a bull flag after it changed its trend due to the bear channel penetration. The longer the price stays above $349-$350, the greater are chances of continuation of the rapid movement. The company is to report on Tuesday after the closure.