At Extreme Investor Network, we understand that the investing landscape can be volatile, especially during earnings season. With a whirlwind of activity in the market last week, traders were on their toes watching some of the biggest stocks make big moves. But how do these moves impact your investment strategy?
According to John Butters at FactSet, companies with negative earnings surprises are seeing their stocks slide by an average of 2.5%, slightly higher than the typical decline of 2.3% for this part of earnings season. On the flip side, positive surprises are only seeing small moves of about 1%. While these numbers may seem small, some of the bigger post-earnings moves have significantly impacted influential stocks like Meta Platforms and Alphabet.
When analyzing these post-earnings moves, technical experts like Katie Stockton from Fairlead Strategies advise watching for “gaps” on the chart. These gaps are created when a stock opens significantly higher or lower than the previous day’s close, leaving a void on the chart where there is little trading activity. If these gaps break through key resistance levels and are not quickly filled in, they can signal potential breakout or breakdown opportunities.
For example, Meta Platforms saw a sharp drop but closed above its lows and ticked up on Friday, indicating a possible upward trend. As for Nvidia, although they have yet to report earnings, the stock’s recent price movement and rebound after a 10% drop provide insight into what to watch for with other tech stocks.
Overall, the market volatility caused by the big moves in tech giants like Meta and Nvidia can impact index-level trades. Hedge fund veteran Larry Benedict notes that individual stock movements can cancel each other out when it comes to overall market influence. Despite the single-stock volatility, the S & P 500 ended the week with a gain of 2.7%, its best week since November.
At Extreme Investor Network, we believe in providing our readers with unique insights and analysis to help navigate the ever-changing investing landscape. Stay informed on the latest market trends and make informed decisions with us.
