Investors patiently monitoring earning releases

Major global stock markets headed lower in the past days possibly as a result of the ongoing uncertainty derived from the virus spread. The situation seems to be reaching a zenith, yet stock markets have traditionally weighed in on the opportunities available depending on special events. By this of course we are referring to the ongoing earnings season that can significantly enhance market volatility and turn investors aggressive. With this being said we turn our attention to some of the stock movers that grabbed the market’s attention recently. Our aim is to present the reasons behind the movement and any potentialities for future price action. As a closure one of the stocks selected will be used for our technical analysis.

Microsoft invests in the future

On Tuesday Microsoft Corporation (#MSFT) share price was down by -2.43% and closed the normal trading session at $302.65. Microsoft was among the stocks that made headlines on Tuesday. On a 52 week basis, Microsoft’s price range was between ($212.63 – $349.67), while its year to date price action is currently at -10.01%. On Tuesday, through its official website, Microsoft Corp. announced plans to acquire Activision Blizzard Inc. Activision Blizzard has been a rather successful and controversial video game producing company with popular games such as Warcraft, Call of Duty and Candy Crush among its most significant accomplishments. Microsoft, with its already popular video game console the XBOX, seems to have elevated its future goals in the sector and is willing to invest an all-cash deal valued at about $75 billion, to acquire Activision. According to the Wall Street Journal this is the largest acquisition Microsoft was engaged in and by far surpasses the ones that took place in the past. The amount invested by Microsoft is evidence that the company is seeing the gaming world expanding even further looking forward and is making serious steps towards being one of the major forces in the industry. However, the gaming sector is strongly related to the Metaverse world that seems to be the future of human communication and connection allowing for different industries to cross within. It is possible that Microsoft’s acquisition of Activision Blizzard could provide the support needed to be able to move closer to the digital platform. Please note Activision Blizzard’s shares gained tremendously upon the news and headed the list of Dow Jones with a +25.88% change in price.

Goldman Sachs notably in red territory

Goldman Sachs (#GS) headed the Dow Jones list losers on Tuesday as it fell by -6.97% and closed the normal trading session at $354.40. On a 52 week basis, GS price range is between ($270.62 – $426.16), while its year to date price action is currently at -7.36%. On the 18    of January Goldman announced its Q4 2021 earnings results. Some of the highlights of the report may have possibly contributed to its daily losses. According to the official report by GS, diluted earnings per common share (EPS) was $10.81 for the Q4 of 2021 compared with $12.08 for the Q4 of 2020 and $14.93 for the Q3 of 2021. Moreover, net revenues in Global Markets were $3.99 billion for the Q4 of 2021, 7% lower than the Q4 of 2020 and 29% lower than the Q3 of 2021. Also, Operating expenses were $7.27 billion for the Q4 of 2021, 23% higher than the Q4 of 2020 and 10% higher than the Q3 of 2021. The rise in expenses was a results of higher compensation costs. These highlights may have overshadowed the fact that during 2021, Goldman generated record net revenues of $59.34 billion. These results may have created some pessimism among investors as some of the highlighted results for Q4 2021 above, are very questionable at this stage.

Netflix earnings report expected on the 20    of January 2021

Netflix Inc. (#NFLX) was also among the stocks that followed the general trend on Tuesday as it lost -2.83% and finished the normal trading session at $510.80. On a 52 week basis, Netflix price range is between ($478.54 – $700.99), while its year to date price action is currently at -15.21%. Analysts and traders will most definitely be interested in the company’s earnings report coming up on Thursday. Specifically information on Netflix’s earnings, revenue, and most-notably, its subscriber growth numbers are at the top of the market’s interest and can move its share price extensively. In the past, the online video service has managed to impress and refute the markets negative expectation on its revenue growth and subscriptions thus we would advise traders to be cautious and analyze the results once they are made public. At the moment, the expectations for the Q4 EPS figure are at $0.82 and its revenue for the same period at $7.71 billion. In the past week, Netflix announced it was increasing prices for its subscription across the US and Canada that would come in effect immediately. This move has the potential of increasing further the revenues of the company in Q1 of 2022. However, this is the first price increase since 2020 implying that the company is now in a position to charge more possibly as more and higher quality content is available.

技术分析

#NFLX H1

From a technical perspective Netflix has been in a clear downward movement since the 30    of December which is characterized with the descending line on our chart. At the moment the price action is moving between the (R1) 519.75 resistance level and the (S1) 504.50 support level. If the price action continues to move downwards then the (S1) could be breached making way for the (S2) 494.50 support line to come into play. Our final support hurdle is noted at (S3) 486.05. The (S1),(S2) and the (S3) where seen for the last time back in June, thus this range could be a new 2022 low if engaged. In the opposite direction, the (R1) 519.75 resistance level can be met first while higher the (R2) 525.85 can also be engaged if the bulls increase their orders. On the other hand the (R3) 533.95 level is the highest among our resistances and was tested for the last time on the 14    of January.  The RSI indicator seems stable just above 30 implying the selling orders may have dominated until now.

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