Welcome to Extreme Investor Network, where we provide you with comprehensive and insightful information on investing strategies and trends. Today, we are going to dive into the world of technical analysis with a focus on three major players in the S & P 500’s communication services sector: Netflix (NFLX), Meta (META), and Alphabet (GOOGL).
While technical analysis has its benefits, it’s important to note that charts alone cannot predict a company’s financial performance. Therefore, we do not recommend making chart-based trades for stocks that are close to reporting earnings. However, analyzing the technical patterns just before and after a stock reports can provide valuable insights for investors.
Let’s start with Netflix (NFLX), which often sets the tone for mega-cap growth stocks as the first large-cap company to release earnings. After reporting a strong quarter recently, NFLX surged by 11% the following day, closing at $764. For those looking to buy NFLX, it can be a challenging scenario to enter after such a significant jump. One strategy that has worked well for NFLX is paying attention to how the stock reacts to earnings-induced gaps, which has been a reliable indicator of future trends.
Moving on to Alphabet (GOOGL), the stock is forming a potential bullish inverse head and shoulders pattern, indicating a positive trend. It’s essential to analyze how GOOGL reacts post-earnings and whether it maintains the bullish formation structure. Keeping an eye on key levels, such as the recent low near $159 and the 200-day moving average, can provide valuable insights for investors.
Lastly, Meta (META) has been a leading stock that recently broke out to new highs. Similar to NFLX and GOOGL, Meta has shown strength in extending from upside gaps and filling downside gaps in 2024. After its upcoming earnings release, investors should watch for Meta to hold above its breakout zone near $540 in case of a negative reaction.
In conclusion, analyzing technical patterns before and after earnings reports can help investors make informed decisions. By focusing on key levels and patterns, such as earnings-induced gaps and bullish formations, investors can better navigate the market and position themselves for success. Stay tuned for more insightful content on investing strategies and trends from Extreme Investor Network.