Why is it that BIDU and AAPL earnings will determine the way the market will go? Tech has really been leading this bounce, had Google missed…. the market would be in the gutter.. .. again…
(To sum up what’s below - the real money is in taking advantage of the volatility of the stocks prior to and post earnings, there will be abnormally large swings back and forth with an unknown direction. Your chance of picking the right direction is about as good as the guy who thought GOOG would be up $95 dollars Friday…………….)
GOOG has brought a lot of momentum to the market the past two days not only aiding in the bounce, breaking out of a 3 month channel but more importantly giving some of the other big boards the credit they deserve with the numbers they hit (RIMM specifically, IBM and others). RIMM shattered expectations beating wall street estimates a few weeks back and based on the way it traded you’d think they straight up disappointed wall street. Yes.. it did traded within a few dollars of its recent highs but just didn’t have enough in it to break $125 on the attempts in the past two weeks. Sure enough with the help of GOOG’s juice it broke through $125 hitting a high of $126.60.
RIMM - $130 is psychological
BIDU unfortunately has been on steroids of some sort lately running into earnings. AAPL has been continually trending up but consolidating more so than BIDU. My fear that if BIDU nails their numbers there is still a good chance it trades down for a period of time as it consolidates and puts in a floor to its recent run. Similarly AAPL may follow the same scenario but may be able to support a higher price near the $180-190 range with a psychological target of $200 and upgrades to $220+
BIDU: Some traders have noticed, the volatility is already on the rise HERE, HERE and HERE
Again this is all hypothetical and there is no way to predict the street, I don’t feel like there is any good play here except to take advantage of the volatility. Long, short or even an options trade might not. Options may screw everyone and end up like RIMM for those looking to close the contract within a day or two. BIDU will probably trade a range of $50 to $60 dollars before tightening up to within $15-20 of the prior close. If they hit their numbers it may settle perfectly at the $320 range filling the gap, consolidating and moving towards $400 over the next 3-6 months. AAPL on the other hand I feel more strongly about, AAPL may hold its gains but must consolidate before a longer term move.
AAPL usually trades fairly well on earnings days (given a good report) and continues its squeeze towards foward looking events (ie: the launch of the new iphone). The main sell off usually happens the day of or day after the launch. (This should be kept in mind for a trade idea) Other ideas include: HERE and HERE.
Overall it’s possible that they nail it, mark accepts and we are off to greener pastures… I however am not convinced…. YET. and it may take another quarter to prove that things are stabilizing and clear sky’s ahead. Not to mention, the last resorts if AAPL and BIDU can’t turn it up will be MA and V on the 28th of April. (Which V on a side note has broken through resistance and people are already starting to talk about $100)
GOOG - if you are looking for a long $550 is breakout
AAPL - $162-163 may retest $170 is breakout
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BIDU - there’s only so much to say… ???????????? sums it up!
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