WINDERMERE, Fla. (Stockpickr) -- With earnings season now under way, market players should be hunting in the technology sector for trading opportunities. This sector is notorious for high volatility and stocks that make sharp moves off their quarterly results.Take, for example, the move in Google ( GOOG) last week after the search giant reported its numbers. The company reported earnings and revenue that smoked analysts' expectations, sending the stock up sharply the following day. Shares of Google were trading at around $559 the day prior to earnings and closed near $600 after the report. >>5 Stocks Set to Soar off Strong Earnings Another great example of how sharply tech stocks can move off of earnings is IBM ( IBM), which reported its numbers yesterday after the market close. IBM's quarterly results failed to impress investors after revenue rose 8% to $26.16 billion, a tad below the average estimate of $26.26 billion. Shares of IBM are down almost 10 points, or about 5.3%, so far today. Clearly, tech stocks are great trading vehicles off of their earnings reports. These names are very popular among the trading community due to the fact their liquidity and high trading volumes. The potential for big moves in tech stocks makes the entire sector worth watching for earnings trades. Here's a look at a number of tech stocks that are setting up to make sharp moves when they report earnings this week.
SanDiskData storage company SanDisk ( SNDK) is set to release numbers on Thursday after the market close. Wall Street analysts, on average, expect SanDisk to report revenue of $1.42 billion on earnings of $1.07 per share. This company has reported a jump in revenue for four straight quarters, as seen by a 16.6% jump in the second quarter, a 19.1% rise in the first quarter, a 6.9% bump in the four quarter of last year and a 31.9% rise in the third quarter of last year. That said, profits have dropped in each of the last two quarters. This stock is trending relativity strong heading into this report with shares trading around 7 points off its 52-week high of $53.61 a share. From a technical standpoint, this stock is currently trading above both its 50-day and 200-day moving averages, which is bullish. The stock has been in a strong uptrend since it bottomed in August at $32.24 a share. During that uptrend, shares of SNDK have been making mostly higher highs and higher lows, which is also bullish. The stock is now setting up to breakout off a solid earnings report. The way I would play this name is to wait until after it report its results and buy the stock once it breaks out above $47.65 to $48 a share on big volume. Look for volume that's tracking in close to or above its three-month average action of 9.1 million shares. A breakout post-earnings above those levels should set this stock up for a run back towards $51 to $53 a share or possibly even higher. I would only short this name after they report if the stock drops below its 200-day moving average of $44.51 a share on heavy volume. A drop back below that key technical level should set this stock up for a fall back towards $42 to $40 a share if the bears pound this down post-earnings. SanDisk, which shows up on a list of 7 Tech Stocks With Limited Downside, was featured last week in " 5 Trading Setups to Ride This Rally."
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