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Investor Fear Impacts Trading After Big Tech Earnings

Investor Fear Impacts Trading After Big Tech Earnings

October 27, 2023

As growth stock managers, we keep a close eye on earnings trends and, more importantly, the market's reactions to those reports. Here is a rundown of that action with a few Big Tech names that have already reported.

Amazon (AMZN) beat significantly on EPS and revenues. Its stock has declined from its recent 2023 high of
$144 in sympathy with other big tech names but is trying to mount a comeback today. A big test will come at the overhead resistance at $134. ´╗┐´╗┐Consider AMZN as a core holding for long term investors.


META also a posted a significant beat on both top and bottom lines. Sellers took its stock from $328 to $280. Attempting to rebound today. The retracement from its recent 52 week high does not disturb the strong uptrend in place.

 


Tesla (TSLA) fell short of EPS and revenue estimates. The company's famous CEO issued a rather bleak, broad economic forecast. Analysts weigh in with mixed ratings. The stock sold off severely - $276 to $204 and pierced through its bullish support line while it was at it. TSLA'S volatility can be intense. Hold off new purchases to see if can break through its bearish resistance line, currently in the $250's range.

 

Microsoft (MSFT) beat on EPS and revenues. Its stock initially soared in after hours, then retreated yesterday. Temporary draw down, likely to resume rise soon.

 

Alphabet (GOOGL) beat on EPS and revenues but warned about next quarter. Investors took their cautious outlook in forward guidance as bearish, apparently not realizing the company has a long history of setting the bar low enough so it’s easier to jump over. The stock retreated towards the bottom of its trading band, violating strong support at $128. Violation of major support is worrisome, let this chart develop further before jumping in.

 

 

Our view is the geopolitical headlines are taking front burner status, clouding longer term assessments of the strong earnings trends. Seasonality also comes into play: as investors probe and test for a bottom, this volatility is not unexpected.