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PayPal Boosts eBay Earnings; Stocks Dropped – July 22, 2010

The online auction giant eBay Inc., ebay as its ticker symbol in the New York Stock Exchange or eBay.com as known to many posted a stunning 2nd quarter net income of $412 million. These gains were driven by its subsidiary PayPal (paypal.com) which provides online money transfer and payment processing for online vendors through credit cards. Ebay’s $2.2 billion dollar revenue, a 6-percent rise from the same quarter a year ago, was propelled by PayPal’s 3-million new users.

Ebay Inc. stock price, however, fell 3% to $20.17 during yesterday’s trading session as the 1.58% slide in the Nasdaq index pulled down all of its components. In any case, if eBay continues to fall, the $20.00 psychological level could be the support. If that marker gets cleared out, the next support would be $19.00. A move upwards, on the other hand, could send it towards the $21.46 resistance. Once the stock value passes above that level, the next resistance could be the $22.90-23.00 area. Nonetheless, given the stocks present downtrend, I’d say that it has a higher chance of moving down in the days to come despite its rosy income.

Bank of America Bears Going for the Kill – July 21, 2010

The Bank of America, the largest bank holding company in the US in terms of assets, or the BAC in the New York Stock Exchange reported that its second quarter net earnings had slipped by 3% to $3.12 billion from $3.22 billion in the same leg the year before. Still, the company managed to hike its consumer loan business which caused its quarter-over-quarter net income to expand by 15%. In any case, the drop in its revenues from last year led investors to sell-off its shares.

As you can see from the chart, the shares of BAC made a bearish gap following the company’s earnings report. At the present, BAC is exchanging just above the 13.50 support. A break below this level would be critical as its next support would already be at 10.0. Technically, a move lower seems to be more probable. Notice that its shares are already trading below the 50-day and 200-day moving averages. Given this, it would therefore need a lot more buying interest to keep it afloat. Both the RSI and MACD are likewise showing some bearish signals with the former having a score of less than 50 and the latter just turning negative. What’s worse is that a bearish gap is usually followed by a couple more gap downs. Time to sell at strength?

Schnitzer Steel Industries Soared After UBS Upgrade – July 21, 2010

Schnitzer Steel Industries, an American steel manufacturer, or SCHN in the Nasdaq index soared yesterday when its shares were upgraded to “Buy” from “Neutral” by UBS. the company’s profit outlook was raised by the mentioned bank due to rising scrap prices and the increasing demand from China for its materials.

As you can see from its chart, it had been trading within a descending channel for quite some time up until last week. It then went flat for a couple of days before surging. As a result of yesterday’s price action, it was able to break above its 50-day moving average and the 46.00 resistance. Its next obvious resistance now would be its 200-day MA. If it is able to move past it, it could continue to rise until it encounters some selling pressure at 56.00. On the flip side, the 46.00 marker should be able to keep it from falling any further in case it weakens. The RSI’s reading, however, is suggesting a probable move higher.

Stocks of Goldman Sachs Rose On Fraud Settlement – July 21, 2010

The Goldman Sachs Group, Inc. or GS as listed in the New York Stock Exchange is currently involved in investment banking, asset management and other financial services. Its second-quarter net income fell 83% to $453 million due to its settlement of civil fraud charges with the Securities and Exchange Commission in the US and betting on a drop in stock-market volatility. During yesterday’s trading session, its stock value continued to go up by 2.2% to $148.91 per share following its fraud settlement. Note also that Goldman Sachs, like in the case of Citigroup which I posted the other day (kindly check here), had positive earnings result for this year’s 2nd quarter, suggesting that the financial sector is indeed recovering well.

The Goldman Sachs stocks has now tripled its value when it was doing $48 back during the 2008 financial crisis. At present, its shares could further head up but could encounter some selling pressure at the $152.00 resistance. If GS successfully breaches above that level, the next critical level could be the 2-year resistance line. If the stock price starts to retreat, on the other hand, the immediate support could be $141.55. And if that level gets taken out and the stocks slide lower, the next support could be $129.50.

Johnson & Johnson’s Disappoints – July 20, 2010

Johnson and Johnson’s (J&J) or JNJ in the New York Stock Exchange disappointed those who are long on the stock when the company, global pharmaceutical and consumer goods manufacture firm, posted a 5.4% decline in the sales of their consumer products for the second quarter of the year. Much of the company’s slide in profits could be attributed to the closure of its Pennsylvania plant due to the failure of its 40 children products to meet the US FDA’s quality control standards. Still, the company earned $3.45 billion in the second leg of the year which was better than the $3.21 billion it had during the previous period. Nonetheless, the slide in their sales resulted to a 1.5% drop in the valuation of their stocks.

Technically, the shares of JNJ likewise gapped down following the company’s less-than-stellar sales figure. In the process, their stocks broke below its short term uptrend line and also fell under its 50-day and 200-day moving averages. So in order for it to be on the positive path again, it now needs to move past the former uptrend line and the 2 MAs. With the RSI falling less than 50 and the MACD just turning negative, the stock would more likely head lower. And if and when it does, its next support would be at 57.50.

IBM Shares Sink Despite Earnings – July 20, 2010

The shares of International Business Machines or IBM in the New York Stock Exchange failed to impress the market despite the 13% rise in the company’s second quarter income. IBM, which is the largest IT company in the world, boosted their EPS to $2.61. Its net income for the quarter jumped by 9% from last year to $3.4 billion. Its total revenue, however, fell short of the market’s $24.17 billion estimate with only $23.7 billion. This was perhaps the main reason why investors still sold of the stocks of IBM despite having a much better EPS.

In fact, the shares of IBM gapped down following the earnings report, losing by about 4%. As you can see from its chart, IBM has been consolidating within a triangle pattern for the last several weeks. Yesterday’s gap down, though, sent it below both the 50-day and 200-day moving average. Given this, it would need a lot more buying interest for it to rise again as it first need take out the mentioned moving average resistances. A couple of indicators also signifying some bearishness. The RSI has just fallen below 50, indicating that its downward momentum is gaining speed. The MACD is also about to make a bearish crossover with its histogram in the verge of turning negative. The only thing that is keeping it alive is the triangle’s support. A break of this support could send it down to 116.00 so watch out!

Profits Flying with Delta Air Lines – July 20, 2010

Delta Air Lines, Inc. or DAL as listed in the New York Stock Exchange posted a $467 million profit for the second quarter of 2010. It made up for the $257 million loss it incurred a year ago. However, its stock price fell by 2.9% to $11.38 during yesterday’s trading session. So here we have another case of stocks which failed to ascend upon releasing the good news (kindly check here: 1, 2 for the recent cases I posted on). No wonder many people are keen on using technical analysis more than fundamentals. Personally, I think it’s better to use both. Anyway, Delta Air Lines’ merge with Northwest Air Lines dated almost 2 years back make them one of the world’s largest commercial carrier. Delta Air and its subsidiaries cater to 66 countries in all continents. They are also the largest fleet of Wi-Fi-equipped aircraft in the world.

Currently, the stock chart of Delta Air Lines is on a 16-month uptrend. The immediate resistance it could encounter is $12.40. Once the stock price passes above that, the next resistance could be the $14.48-15.00 area. If the DAL stocks fail to push higher, the immediate support could be the uptrend. Upon breaking below the uptrend could drop the stock value to the next support at $10.40. As long as the uptrend remains intact, being exhausted to push higher is less likely.

Profits of Texas Instruments: Up, Up and Away! – July 20, 2010

Texas Instruments Incorporated (widely known as TI) or TXN in the New York Stock Exchange is a Texas based American company. It was reported yesterday that their $769 million dollars 2010 second quarter profit nearly tripled its earnings a year ago which is $260 million. For those who aren’t familiar with this company, they are the 4th biggest manufacturer of semiconductors, the 2nd biggest supplier of chips for cellular handsets and the biggest producer of digital signal processors world wide. They are also involved in making infrared systems, missiles, military computers and laser guided bombs. As of this year, they were listed number 223 in Fortune 500.

As a result of its good news, the stock price of Texas Instruments during yesterday’s trading session rose by 3.1% to $25.55 unlike Citigroup, where its stock price sharply fell during the release of its positive earnings result last Friday (kindly check here for my post about it). Chart-wise, I’d still consider the stocks to be moving sideways as it has been for 10 months now. It could remain to continue this way, however, if the $25.85 resistance gets breached, the stocks could start trekking north. Once it does, the next resistance could be $27.44. In case TI decides to take its journey down south, the immediate support it could encounter is $24.73. If the stock value slips and slides below that marker, the next support could be the $22.26-22.65 area.

Canadian Dollar to Rise This Week? – July 19, 2010

Well technically, the daily chart of the CADJPY pair is a bit ugly. As you can see, the pair has just been ranging for the past several months. Presently though, it appears to have found support at the psychological 82.00 level. If this support holds, it can reach its previous high near 86.50, 90.00 or even near 95.00. But if it does not, the 80.00 marker should be able to carry it on its back. A break below 80.00 could be costly as the pair could slide all the way down to 70.00.

Fundamentally though, several economic indicators are pointing to a possible upmove for the pair. Tomorrow (July 20), the Bank of Canada (BOC) is expected to raise its interest rates to 0.75% from 0.50%. Such would make investments in Canada more attractive which would then lead to an increase in the demand for the Loonie, thus, likewise pushing its valuation upwards. A rate hike would also raise the interest differential between the CAD and the JPY. In case you don’t know, the JPY only have an interest rate of 0.10%, netting those who are long on the CADJPY with 0.65%.

Several other economic factors point to a short term rise in the valuation of the Canadian dollar. On Wednesday, Canada’s wholesale sales is projected to print an uptick of 0.3% after declining by the same pace during the previous month. Its retail sales figures, which will be posted the next day, are also predicted to have increased. Core retail sales are seen to have gained by 0.5% after dipping by 1.2% while the headline account is also predicted to have expanded by 0.5% after sliding by 2.0% the other month.

EURO: I’m Back! – July 19, 2010

Good day forex friends! On my post last July 8 (kindly see it here), I questioned whether the EURUSD‘s recent success will be shortlived since it was approaching a significant technical resistance at that time. Back then, it already broke out from a mini inverted head and shoulders formation but still it remained below the longer term downtrend. But based on its present daily chart, you can see that it has just moved past the long term downtrend resistance – finally, a sign of better things to come for the euro bulls! Haay! In any case, the pair could still range or even retrace for awhile given its overbought conditions. If it weakens, the former neckline of the inverted head and shoulders should serve as a support to keep it from falling further. A move to the upside, on the other hand, could send it back up until it encounters some selling pressure at around 1.3250. And as I’ve said, things are looking better now for the euro bulls which means that the euro, at of this moment, has a higher chance of moving north compared to before. Long on weakness anyone?

No major economic events are due in the euro zone up until Thursday (July 22). On that day, the recent manufacturing and service PMIs of France, Germany, and the euro zone itself are all seen to dipped slightly from their last readings. The euro zone’s industrial new orders are also projected to have slipped by 0.1% for the month after logging a gain of 0.6% during the previous period. On Friday (July 23), the German Ifo Business Climate is likewise anticipated to have declined to 101.5 from 101.8. These projections, if they are indeed true, could soften the euro’s climb. Any positive surprise from these, on the flip side, could send the EUR higher.

Oh Google Stocks – July 19, 2010

During the whole year of 2009, the stocks of the internet giant Google Inc. (more known as google.com or GOOG as its ticker symbol) had been on an uptrend and as the year 2010 went in, it started to decline. I’m pretty sure everyone of you knows google.com as you use it for searching almost anything on the web. But do you know they also have interesting products like googlemars and googlemoon? You might want to check those out. Anyway, like in the case of Citigroup found in my earlier post (kindly check here), despite the considerable amount of the 2010 2nd quarter earnings of Google Inc., its stock price intensely dropped by 7% to $459.61 during last Friday’s session. These cases make myself agree on the quote “buy on rumors and sell on news” or probably its just the arising fear of traders and bankers toward the market which makes positive news lead to negative results. However, as a google die hard fan, I’m confident that the company is doing pretty well not only because I benefit so much on their awesome web products but also based on the 2nd quarter figures they released. So if you’re a long term investor and you know how the company fairs you wouldn’t mind these slight changes.

Although not all people are investors, there are a lot out there that are short term traders like myself. That’s why in the stocks of google.com, it only isn’t the fundamentals that I look into but also the technicals. Right now, the stock chart of google is on 4-month downtrend and the current support could be $435.38. If the price further drops below the $435.38 marker, the next support could be the $400.00 psychological level. On the upside, the immediate resistance could be the 4-month downtrend. Once that area gets cleared out, the next resistance level could be $494.70-500.00.

A Look Into Citigroup Inc. – July 19, 2010

Despite the hefty $2.7 billion 2nd quarter profits reported by the banking giant Citigroup Inc. or C as listed in the New York Stock Exchange, it’s stock value failed to rise last Friday. Instead, it fell sharply lower by 6.2% to $3.90 per share. Currently, they are the world’s largest financial services network with more than 15,000 offices worldwide spanning to more than a hundred countries. It’s one of the biggest banks in the United States along with JP Morgan Chase, Bank of America and Wells Fargo. However, during the 2008 financial crisis, some of the big banks were also the biggest losers like in Citigroup’s case as it almost went bankrupt if not for the huge cash injection by the US government.

Right now, there could be a 17-month symmetrical triangle in the stock chart of Citigroup Inc. and the value could remain to move sideways for the following months until it breaks out. If in case the stocks follow up last Friday’s decline, the symmetrical triangle’s support could hold on to the price. If it breaches below that level, the next support could be $3.53. If the market sentiments start turning positive, the Citigroup shares could ascend to the $4.30 resistance. Upon passing above the $4.30 level, the next marker could be the symmetrical triangle’s resistance.

Nikkei 225 Weekend Wrap-up – July 18, 2010

The Nikkei 225 is the stock market index for the Tokyo Stock Exchange (TSE). For those who do not know the Tokyo Stock Exchange – the total market capitalization of its listed companies makes it the second largest stock exchange in the world next to the New York Stock Exchange. Thus, whatever happens to the country as exhibited in this stock exchange definitely has a huge impact on the global stock markets. The Nikkei 225, like what I mentioned about the Shanghai Stock Exchange Composite Index on my last post on it (kindly check here), is also the leading barometer of Japan’s economy along with the Topix. Some of the famous companies listed in the TSE are Sony, Toyota and Honda.

Chart-wise, the Nikkei 225 has been moving sideways for more than a year now. Currently, the index is more inclined to going down during the market opening of the week ahead as the European and US stock markets fell sharply lower last Friday. In case the Tokyo based index drops, there’s a strong support at the 9,000.00 psychological area. If the value slips and slides further below that psychological marker, the next support could be 8,493.77. On the other hand, the current resistance could be the 3-month downtrend. If this index moves past above that, the next resistance could be 9,807.36. Once 9,807.36 gets cleared out, the next resistance could be the 10,000.00 psychological level.

Shanghai Stock Exchange Composite Index Weekend Wrap-up – July 17, 2010

Hi guys, here’s a weekly wrap-up and an update from my last post on the Shanghai Stock Exchange Composite Index or SSEC (kindly see it here). For those who do not know, the SSEC is the major index of the Shanghai Stock Exchange (SSE) and like the Dow, it can be used as a leading barometer of China’s economy. Another thing, the SSE is the world’s third largest stock market by market capitalization despite not being entirely open to foreign investors. Some of the notable publicly listed companies there are PetroChina and Bank of China. In any case, given China’s rank in the global economy (they are the second biggest economy in the world, by the way), what ever happens to the country as exhibited in the index could also have a big impact on the global stock markets.

Chart-wise, the value of this index is moving in a 2-month descending channel and could continue to move this way. As you can see the index had made a “return-move” after breaking down from a descending triangle pattern. Notice that it met some resistance at the pattern’s support. At present, the current support is seen to be at 2,319.74. In case its value drop further below the 2,319.74 marker, the descending channel’s support could hold on to it. On the upside, if the SSEC starts changing direction and heads up north, there could be some selling pressure on the descending channel’s resistance. If that gets cleared out, the next resistance could be the 2,500.00 psychological number which apparently is very near the inverted flag’s former support. But as long as the descending channel remains intact, we could see the Shanghai Stock Exchange Composite Index continue its down-course.

It’s Now the Euro’s Turn to Beat the Loonie! – July 16, 2010

In my last post about the EURCAD pair several days ago (July 9), I mentioned that the Loonie could be preparing for a revolt against the Canadian dollar. Back then, the pair already broke its downtrend line and appeared to be in the phase of forming the right shoulder of an inverted head and shoulders pattern. However, the pair did not fall back down to the bottom of the left shoulder. Instead, it found some support at 1.3000 before springing back up again. And just recently, the pair finally broke out from the mentioned formation. Having said that, this move could now be a reversal that could send the euro back towards 1.4500 against the Loonie. A break below the neckline again could push it back down to 1.3000.

Fundamentally, today’s worse-than-expected drop in the University of Michigan Consumer Sentiment Survey for July (66.5 versus 74.2) caused the investors to dispose the more favored currency, the Loonie, vis-a-vis the euro. Though the projected 0.25% increase (to 0.75% from 0.50%) in Canada’s interest rate this coming Tuesday (July 20) could propel the CAD higher over the euro again. Still, given the unexpected slide in June retail sales of -1.2%, hence a drop in business activity could be enough for the BOC to pause its rate hike. If this happens, then the Loonie would surely weaken as the market already expects that it would raise it. Stay tune!

The British Pound Is Still Pounding the Dollar – July 16, 2010

Good day men and ladies of forex! From my last post about the Cable or the GBPUSD pair back on July 2 (kindly see it here), the have continued to trek along an ascending channel. After it met some resistance at around 1.5200, it fell back only to bounce back again from the channel’s support. It eventually broke above 1.5200 and continued to race past 1.5400. Recently, it marked a new 2-month high at 1.5472. Though with the stochastics already turning south and a likely wall just at the nearby resistance of the channel, the pair could soften for awhile before moving up again. If it weakens, then its likely support would be somewhere around 1.5200. But when it bounces north, it could rise until it encounters some selling pressure at 1.5500.

The pound continued to pound the greenback as the latter continued to show some broad-based weakness against the majority of the other majors. Despite Google’s weak second quarter showing, the demand for the non-dollar currencies remained high. But today, its rise was a bit cut off in spite of the stellar numbers by General Electric, Citigroup and Bank of America.

for today, the pound could extend its rally against the USD if the University of Michigan Consumer sentiment index for July prints a better-than-expected score. The index is seen to have fallen to 74.2 from 76.0. Though given the recent string of rallies in the global markets, the investors sentiment could have picked up during the period. Watch out for the its release today at 1:55 om GMT.

A Look into the German Stock Index – July 15, 2010

The German Stock Index (^DAX) consists of the 30 major German companies trading in the Frankfurt Stock Exchange. Some of the notable companies included in this index are Adidas, BWM, Deutsche Bank and Volkswagen Group. Anyway, the chart of the ^DAX could be forming an ascending triangle formation. If the value breaks above the triangle’s resistance, the next price mark could be 6,626.70. If the 6,626.70 marker gets cleared out, the next resistance could be 6,855.84. In case the index starts heading south, the immediate support could be the uptrend. If the value further slides below the uptrend, the next support could be 5,809.37.

NASDAQ Update – July 15, 2010

The last post of my colleague about the Nasdaq Composite Index was when it still looked to forming a head and shoulders formation (kindly see it here). What actually looked to be a head and shoulders formation back then could actually be falling wedge formation now. Given the instance that the value breaks above the resistance of the falling wedge, this index could edge higher to the price mark at 2,341.11. If the 2,341.11 marker gets cleared out, the next resistance could be 2,434.29. In case the falling wedge set up fails, the immediate support we could be looking at is 2,061.14. If the value drops further 2,061.14, the next support could be the 2,000.00 psychological level.

Where Could the Swissy Go? – July 15, 2010

Good day forex peeps! Here’s my ‘weekly’ update on the USDCHF pair. As you can see from the chart, the pair has returned back in the area of the inverted head and shoulders after it broke out and reached a high of 1.1731 last June 1. It then suffered 5 straight weeks of heavy declines after reaching the mentioned high (click here to see my previous post). At present, the pair is hanging on the 1.0500 support. Should this support gives way, the pair could race towards its previous low just below 1.0200. The swissy could even be on parity again with the greenback if the pair breaks below 1.0200. A couple of indicators, though, indicate that it could head higher. During the past two weeks, the pair has drawn a bullish hammer and a doji, both of which suggest a possible reversal to the upside. The presence of a bullish divergence, where the price goes higher and the stochastics go lower, also suggest a likely move north. But if the pair indeed rebounds, it could still meet some resistance at the neckline of the former inverted head and shoulder. A break above this could send it back to its 1.1731 high.

On the fundamental front, despite the recent favor for the greenback due to the markets’ present bullish outlook and the US’s firms’ expected stellar earnings reports, the Swissy could still lose some support if the Swiss National Bank (SNB) decides to interfere in the forex market to weaken the CHF. The SNB, for those who does not know, is very notorious in doing so. In fact, interfering in the markets is one of its major tools in keeping the Swiss economy in check. The SNB favors a weak currency because Switzerland is highly dependent on exports. A strong currency, therefore, could dampen the country’s exports market. In the bank’s last statement, it mentioned that the strength of the CHF has not affected the economy in a negative sense. but that was then. After the USDCHF pair marked a 1.1731 high, the Swissy has rebounded strongly by about 1,200 pips. Therefore, there’s always an outside chance that the bank could sooner or later purposely weaken its currency. If it does not, then the CHF could continue its upside ride as the global market rebounds.

The US Dollar Seen Weakening – July 15, 2010

Extra! Extra! The US dollar has buckled its long term uptrend? Will it head south now? On today’s chart is my recent take on the US dollar index. For quite some time now, the US dollar had been gaining a lot of [Read more...]