EarningsBeats Digest

Published: Fri, 01/28/22

EarningsBeats.com Digest for January 28, 2022

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How Will A LEADING Internet Stock Perform With Earnings?

One week ago, Netflix (NFLX) was set to report its quarterly results, but Wall Street did not seem to like much about the company heading into that report. In our "Sneak Preview - Q4 Earnings" event, we specifically mentioned NFLX as a company to be very careful with as it approached earnings as it was a lagging stock within a lagging industry. NFLX saw a massive gap lower with disappointing results. Well, the industry performance hasn't really changed, but early next week, a leader in the space will report - Alphabet (GOOGL):

While GOOGL is definitely showing leadership, I don't expect it to matter much in a cyclical bear market. GOOGL broke down from a head & shoulders top last week and it has since tried to rally back to neckline resistance. I see the 20-day EMA as the final straw in terms of key resistance and that's currently at 2714. If GOOGL comes through with a strong report and sees a positive reaction next week, the 20-day EMA is the level where I'd expect to see a reversal back to the downside. Eventually, the head & shoulders top measures to a minimum of 2360 or so.

Happy Trading!

Tom Bowley
Chief Market Strategist

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