That was a wild week of earnings. Let’s see if we’re in for more of the same in the coming days.
Facebook, now called Meta Platforms Inc. (Nasdaq: FB), tumbled 25% Thursday, dragging markets lower.
Then, Snap Inc. (NYSE: SNAP), another social media stock, posted its first quarterly profit after the market closed that same day. Its stock shot up more than 50%!
A ton of other stocks are making double-digit moves as well. It’s easy to get sucked into the hype. But let’s not forget about the opportunities these one-day moves create — a post-earnings drift that you can capitalize on.
These moves, well after earnings are over, can send stocks soaring in the same direction.
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And it’s also what we focus on in Earnings Edge.
Take Sirius XM Holdings Inc. (Nasdaq: SIRI), one of our stocks from last week. SIRI only had a 1% premarket move before it surged as much as 7% Tuesday.
That was enough to trigger a break higher out of the wedge pattern we were tracking and now signals Sirius has more gains ahead.
Regeneron Pharmaceuticals Inc. (Nasdaq: REGN) didn’t do much and failed to break out of the wedge pattern. Give it a little more time.
Let’s dive into our two stocks this week that are set for more big moves…
Earnings Edge Stock No. 1: Fiserv Inc. (Nasdaq: FISV)
Earnings Announcement Date: Tuesday, before the open.
Expectations: Earnings at $1.56 per share. Revenue at $4.24 billion.
Average Analyst Rating: Outperform.
Fiserv, the payment and financial tech company, sounds like a stock that would have rocketed to the moon along with the rest of the market over the past two years.
Instead, FISV has struggled.
After rallying out of the pandemic crash, the stock peaked in April. It’s now 15% below its pre-pandemic highs.
That’s not a great sign.
And now we have a significant price pattern forming — the descending triangle pattern.
FISV’s Downward Trend
Source: Optuma.
This is key to watch, especially going into earnings.
FISV is attempting to break past the resistance from last April, but a weak earnings report would send the stock back to the low $90s.
Triangle patterns like this are my favorite for two key reasons:
- It shows us the main levels that are significant.
- We have an expected price target once the breakout occurs.
That crucial information is all there on the chart.
Once one of those key levels breaks, we can expect FISV to run another $30 in the same direction. That’s roughly a 30% move depending on the exact breakout level.
This week’s earnings report could push us to a breakout point.
Earnings Edge Stock No. 1: Expedia Group Inc. (Nasdaq: EXPE)
Earnings Announcement Date: Thursday, after the close.
Expectations: Earnings at $0.07 per share. Revenue at $2.24 billion.
Average Analyst Rating: Outperform.
Online travel website Expedia is trading in a similar pattern but heading the other direction. This is called an ascending triangle pattern.
As I mentioned, these patterns are great for predicting big moves.
And both stocks are at a point to make a big jump.
By following airlines and other tourist businesses, we know those industries have not bounced back yet. That could weigh on Expedia, which is flirting with new all-time highs.
A breakout here and EXPE is off to the races. But a weak earnings report and look out below.
EXPE Hangs in the Balance
EXPE could tank to $160 on earnings and potentially fall to $110 beyond that — a 40% decline.
That price decline is based on the triangle pattern and the $50 spread between recent highs and lows ($190 high minus $140 low point).
This means there’s significant upside, too, with the same potential $50 move higher once a breakout occurs.
That’s why this earnings report is one to watch.
EXPE has tested this resistance level multiple times in the last few weeks, and a failed attempt to break out this time would all but guarantee another sharp decline.
Regards,
Chad Shoop
Editor, Quick Hit Profits
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