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January 17, 2006
IBM, Intel and Yahoo! Kick off Earnings Season
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Earnings season kicks off this week with Intel (INTC), IBM (IBM) and Yahoo! (YHOO) reporting earnings today. Today, I will look at the charts for these three key players.
IBM has been trending higher since April 2005, but its January performance is not impressive. The stock fell sharply in December and found support just above 80. There is a big gap around 85-86 and this level acts as resistance. The stock was late to the January rally and only started moving with the 6-Jan gap. However, there was no follow through and the stock traded indecisive the last five days. I must say that I am not impressed with price action since mid December gap and find that this stock shows more weakness than strength. A move above 85 would break the January high and open the door to the low 90s. A move below 80 would fill the 6-Jan gap and be most bearish.
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Yahoo! (YHOO) has also gotten cold feet in January and fell sharply over the last four days. The stock broke resistance at 39 with a strong move in November and then consolidated between 39 and 44. This consolidation was healthy and the 6-Jan gap appeared to signal a continuation higher. However, the gap failed to hold and the stock move below 40, which makes this a bearish exhaustion gap. Technically, the trend is flat and the breakout at 39 is holding. This is a make-or-break point for Yahoo!. A strong stock should hold the breakout and continue higher. A weak stock will not hold the breakout and a break below support at 39 would reverse the current uptrend.
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Intel (INTC) lifted the Nasdaq and Semiconductor group with a strong advance in November. The December decline looks like a falling wedge and the stock broke trendline resistance with a surge the first week of January. The surge faded last week and the stock corrected over the last 5-6 days. This decline looks like a falling flag and a move above 26.7 would signal a continuation higher.
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Posted by Arthur B. Hill at January 17, 2006 09:13 AM