Enthusiasm for Federal Reserve Board Chair Janet Yellen’s dovish comments last week have started to fade, replaced by concerns over the start of the first-quarter earnings season on April 11 and growing evidence that the tightening labor market and higher inflation rate will force the Fed’s hand in June, if not in April.
As a result, a number of large, mega-cap stocks have rolled over into what appear to be new downtrends. If you’re long these names, it’s time to sell. If you’re not, and a more aggressive trader, these make attractive short-side or put option plays.
Ford (F) shares are testing below their 50-day moving average for the first time since late February.Although March auto sales were strong, there are growing doubts about the sustainability of the current pace of purchases given focus on subprime lenders and a flood of off-lease vehicles about to hit the used car market and depress prices.
The company will next report results on April 28 before the bell. Analysts are looking for earnings of 47 cents per share on revenues of $35.7 billion.
Bank of America (BAC) are getting hit by a surge of strength in long-term Treasury bonds. That’s pushing long-term interest rates down and hitting the net interest margins that directly impact bank profitability.As a result, shares of BAC have moved to the lower end of a two-month consolidation range and look set for a possible test of their February low should the 50-day moving average be breached.
The same forces weighing on Ford have hit shares of General Motors (GM) as well, pushing them below their 50-day moving average from above for the first time since December.
GM reports results on April 21 before the bell. Analysts are looking or earnings of $1.01 per share on revenues of $35.8 billion.
Morgan Stanley (MS) shares only saw a limited lift off of their Feb. 11 low and have been rolling lower ever since.A break of critical support near $24 would put the lows near $21 back in play.
The company will report results on April 18 before the bell. Analysts are looking for earnings of 59 cents per share on revenues of $8.4 billion.
Citigroup (C) is resting on support near its 50-day moving average after drifting lower over the past few weeks.A long-term downtrend has been in place since last summer, ending a long sideways consolidation going back to 2013. A break of support here would put the February lows near $36 in play.
Citigroup report results on April 15 before the bell. Analysts are looking for earnings of $1.13 per share on revenues of $17.7 billion.
Crude oil prices are on the slide again as the long promised production freeze deal between Russia and OPEC has failed to coalesce.After peaking near $42.50 a barrel, crude prices are back near $35. As a result, (BP) shares have dropped out of a three-month uptrend pattern — being downed away from resistance near $32 going back to December.
The company will report results on April 26. Analysts are looking for the company to post a loss of 13 cents on revenues of $41.2 billion.
ConocoPhillips (COP) shares are threatening to break below support near $38 as energy prices drift lower. If the 50-day moving average near this level cannot hold, watch for a test of the January-February lows between $34 and $32.
The company will next report results on April 28 before the bell. Analysts are looking for a loss of 87 cents per share on revenues of $7.7 billion.
At the moment of writing J.Mason hold (GM) (C) (MS) securities.