Better-than-expected Microsoft earnings
Each evening we focus on the most interesting aspects for the upcoming trading day. The comments are based on observations of the nightly updates of the Stocks/Sectors and Market Bias pages. They are provided for educational purposes only and are not intended to be direct trading advice. Also, keep in mind that these remarks are made up to 12 hours in advance of the markets opening. Therefore, overnight events may alter the outcome of these observations.
At the time this is being published, the S&P Globex Futures are trading 3.20 points higher and the Bond Market Futures are trading down 2 ticks.
Heads up, after the close Microsoft [MSFT>MSFT] announced better-than-expected earnings and a positive forecast going forward. The stock traded over 4 points higher in early Instinet trading. This may be the shot in the arm the market needs to resume its rally out of an oversold condition. However, you may want to keep an eye on the bond market which closed at life-of-contract lows today as it seems to be keeping a lid on stocks.
Aironet Wireless Communications [AIRO>AIRO], mentioned over the past few nights and on the Pullbacks List, appears to be rallying out of a pullback (a).
Broadvison [BVSN>BVSN], also on the Pullbacks List, looks poised to resume its uptrend, especially if it can take out yesterday’s pivot high (a high surrounded by two lower highs).
For you breakout players, Glaxo Wellcome [GLX>GLX], mentioned last night and in the strong Drug Sector [$DRG.X>$DRG.X], broke decisively out of a cup and handle formation today (a).
On the short side, United Health [UNH>UNH], on the Pullbacks From Lows List, looks poised to resume its meltdown. Texas Instruments [TXN>TXN], on the Below 50 DEMA-DV List, appears to be breaking down out of a big picture double top formation. This, in spite of announcing better-than-expected earnings today.
Best of luck with your trading on Wednesday!
Dave Landry
PS – Reminder: Protective stops on every trade!