Looking for hints in the stock charts ahead of earnings results from Meta and Alphabet

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Frank Cappelleri shows how he breaks down a company's stock chart ahead of earnings results.

While technical analysis has many benefits, charts can't help one predict a company's financials. Thus, we never recommend chart-based trades for stocks that are within a week or two of reporting earnings. However, that does not mean we should ignore the technicals. In fact, the period just before and just after a stock reports is a perfect time to review the relevant patterns and levels.

had a strong report last Thursday, the market rewarded it with a huge 11% gain the following day. The stock gapped higher and continued to advance before closing all the way up at $764. For holders of over the last year is paying attention to how the stock behaves vis-à-vis its earnings-induced gaps. It's had noticeable gaps post earnings in three of the last four quarters before this one – Two up and one down .

trying to hold above and, potentially, extend from last week's gap. Alphabet bullish pattern Alphabet reports earnings next week on Tuesday. The stock's technical set-up is crystal clear: it's been forming a potential bullish inverse head & shoulders pattern since coming back from the late-August to early-September sell-off. The back-and-forth price action the last three weeks has constructed the pattern's would-be right shoulder.

 

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