DeMark Trading Overview Into Tech Earnings $FB $GOOGL $AMZN $AAPL

Fil Zucchi

A quick look at what the stock charts are saying about 4 very popular large cap tech stocks heading into their earnings this week.

The stocks include Facebook (FB), Google (GOOGL), Amazon (AMZN) and Apple (AAPL).

Note that this analysis is a brief, chartless look using DeMark analysis, counts, and price levels based off Friday’s closing.

Let’s start with Amazon…

Amazon (AMZN)

Despite the $230 (20%) surge in Amazon’s stock price this month (gulp!) only the daily stock chart shows signs of upside exhaustion, with an active DeMark Countdown Sell 13 and Friday’s closing price just above the related “Risk Level”.  Over the last year daily “Countdown Sell 13s” have served as inflection points for consolidations and pullbacks, but the only time decent money was made on the short side was in August of last year. The other corrections were short, shallow moves. The daily chart must also be looked at in the context of weekly and monthly timeframes, and in those longer-dated charts the January surge has served to start fresh upside moves with ways to go.

Facebook (FB)

FB presents a somewhat opposite picture from AMZN. The daily stock chart shows a short-term path to higher prices; the weekly stock chart has no active indicators and the price is just above Risk Level ($187.11) tied to the last expired Countdown Sell 13; the monthly chart has an active DeMark Countdown Sell 13 signal (Risk Level at $203.18), but it needs to crater below $170.87 to get confirmation.

Google / Alphabet (GOOGL)

GOOGL shows an active daily Countdown Sell 13 completed on January 24 (Risk Level at $1,206), but the current developing Countdown Sell 13 (tied to a completed TDST Sell Setup on January 12), is only on bar 9. The weekly chart just completed a Countdown Sell 13 on Friday (Risk Level at $1,233.30), but it has yet to complete the expected Countdown Sell 13 tied to a later TDST Sell Setup (printed on 10/27/17); the monthly chart continues to argue for more upside.

Apple (AAPL)

A funky set of charts here. The consolidation of the last couple of months has effectively invalidated all completed DeMark daily counts, leaving the stock without a clear trend of any kind; the weekly chart shows a developing Countdown Sell on bar 8 (the “reference bar”, i.e. the bar around which a pullback often takes place, before the final burst higher and the eventual completion of the 13 count).  The most bullish view shows up on the monthly chart, where a developing Countdown Sell 13 is only on bar 6 of the expected 13.

So, what to do you may ask? I’m staying away from AMZN, FB and GOOGL altogether. A while back, when the charts looked different, I bought a small “butterfly” on FB Feb 9 puts. Those strikes are now well out-of-the-money, and I’m counting the position as dead-and-buried.  If the stock craters post-earnings I’ll notch it up to a gift, but it’s not a position intended to play earnings.

I do have a decent size position in AAPL consisting of long monthly (Feb 16) near-the-money calls vs. short stock, delta neutral. It reflects a weak opinion of which way the stock will go post-earnings, but a belief the move will break the stock out of its two-plus months of consolidation, and that such break is likely to exceed AAPL’s average 4.5% post-earnings move.

 

Thanks for reading and good trading!

 

Twitter:  @FZucchi

The author is long FB and AAPL at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

 

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