Meta, Microsoft and Apple to report earnings. What the charts show
Megacap earnings kick off this week and are especially important for the major indices, given the ” Magnificent 7 ” account for roughly a third of the S & P 500 Index . From a technical perspective, we focus on their setups heading into the earnings prints to assess whether the probabilities favor positive or negative reactions. Just as important is the post-earnings response, where we look for technical catalysts in the form of breakouts or breakdowns. Meta Platforms (META) and Microsoft (MSFT) , which report earnings on Wednesday, both display favorable technical setups heading into their releases. Each stock has undergone a prolonged corrective phase that has brought price back toward long-term, cloud-based support, denoted by the shaded area on the chart. META successfully retested its cloud last week, associated with an upturn in the weekly stochastics and improvement in intermediate-term momentum, reflected by a rising MACD histogram. MSFT also successfully tested cloud-based support last week and now shows a pending oversold upturn, alongside consecutive upticks in its MACD histogram. For META, resistance to watch sits near $681, defined by the Q4 earnings gap and the upper boundary of the cloud model. A gap above this level that holds through the end of the week would be a bullish catalyst, opening the door for a retest of the all-time high near $796. Conversely, a negative earnings reaction that results in two consecutive weekly closes below the cloud model would constitute a breakdown, targeting secondary support near $526. For MSFT, a positive catalyst would be confirmed by a decisive breakout above resistance in the $481-$485 zone, which is defined by the upper boundary of the weekly cloud model and the 200-day moving average (MA). Above this level, the next major resistance is the all-time high near $555. A breakdown below the cloud model in response to earnings would shift our focus to secondary support near $425. AAPL has also pulled back in recent weeks, generating an intermediate-term oversold condition ahead of its earnings report, which increases the likelihood of a positive initial reaction from a technical perspective. Should this occur, we would be watching for a breakout above resistance near $275 as evidence the correction has matured. Intermediate-term momentum remains weak for AAPL, with the weekly MACD histogram trending lower, so we believe a retest of support may occur after an initial move higher. Support for AAPL lies in the $235-$243 area, defined by a Fibonacci retracement level and the 200-day MA. Secondary support from the weekly cloud model is well below current levels. Given their size, AAPL, META, and MSFT earnings outcomes are likely to matter for the broader market. After corrections lasting several weeks, these stocks appear better positioned for positive initial reactions than peers such as Alphabet (GOOGL) , which remains overbought near all-time highs. As a result, their post-earnings behavior should offer insight into whether momentum can reaccelerate for the major indices. —Katie Stockton with Will Tamplin Access research from Fairlead Strategies for free here . DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. 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