The S&P 500 Continues To Advance After Its Upside Breakout From a Bearish Trendline Last Week
Jason Lubin October 5, 2020 4:10 PM
Big earnings releases this week include PAYX, RPM, LW and DPZ.
On Tuesday, Paychex (PAYX) is awaited to post first quarter EPS of $0.55 compared to $0.71 a year ago on revenue of $893.6 million vs $992.0 million last year. The Co provides payroll services and on September 24th, the Co announced solutions to help its customers manage their businesses using Paychex's new COVID-19 leave tracking, screening and health attestation applications. Technically speaking, the RSI is above its neutrality area at 50. The MACD is positive and above its signal line. The configuration is positive. Moreover, the stock is above its 20 and 50 day MA (respectively at $77.61 and $75.59). We are looking at the final target of $85.40 with a stop-loss set at $75.60.
On Wednesday, RPM International (RPM) is likely to unveil first quarter EPS of $1.18 vs $0.95 last year on sales of $1.5 billion, in line with the previous year. RPM International manufactures a variety of paints, coatings, and adhesives, and its current analyst consensus rating is 8 buys, 7 holds and 0 sells, according to Bloomberg. From a chartist's point of view, the RSI is above its neutrality area at 50. The MACD is above its signal line and negative. The MACD must break above its zero level to trigger further gains. Moreover, the stock is trading above its 20 day MA ($82.4) but under its 50 day MA ($83.46). We are looking at the final target of $89.40 with a stop-loss set at $78.40.
Additionally on Wednesday, Lamb Weston (LW) is expected to announce first quarter EPS of $0.31 compared to $0.79 a year ago on revenue of $868.4 million vs $989.0 million last year. The Co is a producer of frozen potato products and its stock price is anticipated to move up or down by 10.2% based on options volatility. The stock fell 11.5% after they last reported earnings. From a technical point of view, the RSI is above its neutrality area at 50. The MACD is positive and above its signal line. The configuration is positive. Moreover, the stock is trading above both its 20 and 50 day MA (respectively at $65.1 and $63.86). We are looking at the final target of $75.30 with a stop-loss set at $62.50.
On Thursday, Domino's Pizza (DPZ) is anticipated to release third quarter EPS of $2.73 vs $2.05 last year on sales of $945.5 million compared to $820.8 million a year ago. The Co is the world leader in pizza delivery and on September 14th, The Evening Standard reported that Domino's is creating 5,000 news jobs in the U.K. as it continues to benefit from the pandemic due to households turning to its delivery services. Looking at a daily chart, the RSI is above 70. It could mean either that the stock is in a lasting uptrend or just overbought and therefore bound to correct (look for bearish divergence in this case). 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 $403.57 and $401.35). We are looking at the final target of $463.00 with a stop-loss set at $413.00.
Looking at the S&P 500 CFD on a 30 minute chart, the index is continuing to advance after breaking out to the upside of a short-term bearish trendline last week. The S&P 500 CFD closed up 1.3% last week, which could indicate that it is regaining some upside momentum. Price will probably rise to retest its first resistance level at 3,429.00. If the momentum persists and price breaks out above 3,429.00, it should clear a path to 3,454.00. If price can reach 3,486.00, it would be an extremely bullish signal that could give the index a boost to retest all-time highs. If the index declines, traders should look to the 3,346.00 support level for a potential bounce. If the index breaks out to the downside of 3,346.00, then 3,311.00 would be the last line of support. If price cannot hold above 3,311.00, it would be a bearish signal that could send prices spiraling downwards once again.
Source: GAIN Capital, TradingView