Watch These 3 Leaders With Earnings Due; S&P 500 Futures

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Validea Peter Lynch Strategy Daily Upgrade Report - 12/9/2017


Futures for the S&P 500 index rose modestly Monday morning as Bitcoin futures surged  at Cboe Global Markets ( CBOE ) from  their Sunday debut.

[ibd-display-video id=3012111 width=50 float=left autostart=true] S&P 500 standouts Micron Technology ( MU ), Adobe Systems ( ADBE ) and Red Hat ( RHT ) all have Composite Ratings of at least 95 and have recently found support at their 50-day moving averages . All three report report earnings over the next two weeks.

S&P 500 futures rose nearly 0.2% vs. fair value. Nasdaq 100 futures advanced 0.15% above fair value. Dow futures climbed 0.2%.

All-time stock winners often have Composite Ratings of 95 or better near the start of big runs. Micron Technology boasts a 95 Composite Rating while Adobe Systems and Red Hat have best-possible 99 CRs.

The 50-day moving average and its related 10-week line are key technical areas where institutional buyers often step in to add shares. It can offer new buying opportunities for investors.

Adobe Systems

The digital media and marketing software firm reports fiscal Q4 results Thursday. Wall Street expects per-share profit rising 28% to $1.15, with revenue up 21% to $1.948 billion, according to Zacks Investment Research.

Adobe Systems plunged more than 6% on Monday, Dec. 4, just undercutting its 50-day moving average. Shares fell again on Tuesday, but rebounded to retake that key support in above-average volume, though in lighter trade than in the prior two days of selling. Adobe closed Friday at 173.57, about 6% off its Nov. 28 peak.

Oracle ( ORCL ), another major software maker but with a so-so 76 Composite Rating, also reports quarterly results late Tuesday. Analysts expect an 11.5% EPS rise to 68 cents while revenue climbs 5% to $9.557 billion.

Oracle retook their 50-day line on Friday after finding support at its 200-day line earlier in the week.

IBD’S TAKE: Buying or holding a stock can be risky heading into an earnings report. Here’s an earnings options strategy that can help you cash in on post-earnings stock gains, while minimizing the risk from a weak quarter.

Micron Technology

The memory chip giant reports on Dec. 19.  Micron’s earnings should skyrocket 587.5% to $2.20 with sales surging 61% to $6.387 billion. Credit surging demand and prices for memory chips, though Morgan Stanley warned memory prices could cool .

Spurred by that warning, Micron tumbled sharply from late November to Dec. 4, falling below its 50-day line along the way. The chipmaker has rallied for the last four sessions, just retaking its 50-day line on Thursday. Shares popped intraday Friday, rising to 44.58, but closing up just 1 cent at 43.21.

Red Hat

The Linux software giant also reports Dec. 19. Red Hat is expected to report earnings per share of 70 cents, up 15%. Revenue should climb 19% to $734 million.

Like Adobe, Red Hat retreated from a record high on Nov. 28 to tumble to just below its 50-day line on Dec. 4. The stock quickly regained that key level over the next four sessions, though on decelerating volume. Red Hat closed Friday at 125.29, 3% off its peak.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



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