The S&P 500 Reaches a New Record High
Jason Lubin August 24, 2020 11:20 PM
This week's major earnings to keep an eye on.
On Tuesday, Salesforce.com (CRM) is anticipated to release second quarter EPS of $0.67 vs $0.66 last year on sales of $4.9 billion compared to $4.0 billion a year ago. The Co develops business software and on August 19th the Co announced that it extended its work-from-home period to July 31st, 2021. In related news, the Co revealed a strategic relationship with CVS Health (CVS) that will allow customers to use both company's COVID-19 return to work and campus solutions together, in order to create the safest environments possible for returning employees and students. Looking at a daily chart, the RSI is above its neutrality area at 50. The MACD is above its signal line and positive. The configuration is positive. Moreover, the stock is above its 20 and 50 day MA (respectively at $198.48 and $192.81). We are looking at the final target of $231.40 with a stop-loss set at $197.00.
Also on Tuesday, Hormel Foods (HRL) is expected to announce third quarter EPS of $0.35 compared to $0.37 a year ago on revenue of $2.4 billion vs $2.3 billion last year. The Co produces meat and food products, and its expected move based on front-month options is 5.1%. The last time the Co reported earnings the stock fell 4.1%. From a technical point of view, the RSI is above 50. The MACD is above its signal line and positive. The configuration is positive. Moreover, the stock is above its 20 and 50 day MA (respectively at $51.59 and $49.62). We are looking at the final target of $54.50 with a stop-loss set at $51.50.
On Thursday, Dollar General (DG) is likely to unveil second quarter EPS of $2.40 vs $1.74 last year on sales of $8.3 billion compared to $7.0 billion a year ago. The Co operates a chain of discount stores and on August 5th the Co announced that it plans to build a new distribution center in Walton, Kentucky and three DG Fresh cold storage facilities in Bowling Green, Kentucky; Ardmore, Oklahoma and West Sacramento, California. The new facilities are expected to create 600 new career opportunities. From a chartist's point of view, the RSI is above 50. The MACD is above its signal line and positive. The configuration is positive. Moreover, the stock is trading above both its 20 and 50 day MA (respectively at $194.80 and $191.68). We are looking at the final target of $211.60 with a stop-loss set at $192.90.
Additionally on Thursday, HP (HPQ) is awaited to post third quarter EPS of $0.43 compared to $0.58 a year ago on revenue of $13.3 billion vs $14.6 billion last year. The Co provides computers, printers and printer supplies, and its current analyst consensus rating is 4 buys, 11 holds and 2 sells, according to Bloomberg. Technically speaking, the RSI is above its neutrality area at 50. The MACD is below its signal line and positive. The stock could retrace in the short term. Moreover, the stock is trading above both its 20 and 50 day MA (respectively at $18.02 and $17.47). We are looking at the final target of $19.90 with a stop-loss set at $17.20.
Looking at the S&P 500 CFD on a 30 minute chart, the index made a new all time high of 3427.9 this morning. The index will likely continue to advance due partly to the Fed's Meeting Minutes report released last week which noted that Central Bankers have decided to postpone any changes to the Federal Funds Rate for the time being. Using Fibonacci extensions on a short-term basis price will probably rise towards the first extension level at 3449.00. If price can break through the first extension level, the next reasonable target is the second extension level at 3461.00. If price pulls back it could be a large move given the mixed economic conditions. With that being said strong support may be seen at the last high in February at 3397.00. If price can not manage to hold above 3397.00, a rebound could occur at 3381.00.
Source: GAIN Capital, TradingView
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