In last evening’s Forecast Report, Yahoo (YHOO) signaled a potential long trade entry point at 16.20 and 16.30, even up to 16.40.
This morning, YHOO opened near the pre-market high of 16.67. It did move as low as 16.35 in pre-market trading. A buy there, as measured to the regular session high of 16.49, was 0.9% in the black. The stock has moved through our targets in afternoon trading, recently hitting a session low of 15.77 and trading near that mark late in the regular session.
Stocks ended their sixth straight week with gains, but a number of financial companies, including Bank of America (BAC) and U.S. Bancorp (USB) still have yet to report results. Aside from banks, technology companies will also dominate earnings this week as investors hear from IBMÂ (IBM), Microsoft Corp. (MSFT), and Advanced Micro Devices Inc. (AMD).
Goldman Sachs (GS) and Wells Fargo (WFC) have eased some investors concerns after posting earnings improvements in the first-quarter, however, some of the optimism was reigned in last week after UBS AG (UBS) said it expects to report a first-quarter loss of nearly $1.75 billion and will cut 8,700 jobs worldwide by the end of next year. Citigroup (C) also reported better-than-expected first-quarter results Friday, though the company continues to take charges to reserve for consumer defaults.
On Monday, IBM reports its first-quarter results in after-hours trading, and analysts polled by Reuters expect a profit of $1.66, up 1.2% from a year ago, on revenue of $22.6 billion. The stock is down 16% over the past 12 months.
Investors trading into earnings should know that IBM favors a long-term reversal pattern in its session-to-session performance, crossing narrower next-day percentage closing levels following after-hours earnings events in 11 of the last 19. However, the near-term is mixed, with the stock widening once, narrowing once, and reversing twice its rafter-hours move in the following regular session. On January 20, the stock rose 4% in after-hours trading when IBM guided for higher 2009 earnings. The stock widened its move in the following trading session, ending up 11.5%.
Yahoo! (YHOO) is due with its first-quarter results after the close on Tuesday and is expected to report earnings of $0.08 per share, down 27% from a year ago, on revenue of $1.2 billion. Yahoo shares are down 50% over the past 12 months and are trading slightly above their 50-day moving average.
Investors trading into earnings should know that in the near-term, Yahoo is trending toward widening its after-hours move, doing so in two of the last four quarter. On January 27, the stocks rose 4.2% in after-hours trading after earnings beat the Street. The stock widened its move in the following regular session, ending up 7.9%.
Investors will get a further glimpse of how well technology companies are faring in the weakening global economy, however, further job cuts and continuing concerns over the credit crisis will likely take center stage. So far, technology companies have given investors a mixed picture of their fourth-quarter. Apple Inc. (AAPL) reported better-than-expected results, while Microsoft (MSFT) reported results that missed the Street and announced 5,000 job cuts.
Yahoo! Inc. (YHOO) is expected to release its quarterly results after the close of trading on Tuesday, and analysts polled by Thomson Reuters are expecting the company to report a profit decline of 13.3% to $0.13 per share on revenue of $1.37 billion. Yahoo shares have been quite volatile over the past few weeks as the company has named a new CEO and cut 1,500 jobs last month. The company’s bigger rival, Google Inc. (GOOG) reported revenue that just beat analyst estimates and profit that tumbled from a year ago on employee stock compensation costs and the charges on its deteriorating investments. Investors looking to trade into earnings should know that Yahoo shares have a tendency to narrow their after-hours move in the following regular trading session, doing so in three of the past four quarters.
On Thursday, Amazon.com (AMZN) is expected to report results after the close of trading, and analysts expect the company to post a profit decline of 19% to $0.39 per share on revenue of $6.4 billion. Amazon shares frequently widen their after-hours moves in the following regular session, doing so in 15 of its last 20 after-hours earnings events. However, the near-term pattern is mixed, crossing two widening and two narrowing trades in its last four quarters. Last quarter, the stock dropped 13.6% in after-hours trading after the company cut its outlook for the year. The stock reversed direction the following trading day, ending up 0.6%.
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