How Apple, Amazon, Google, Netflix, Tesla Momentum Changed Post-Earnings

NEW YORK (TheStreet) -- Each of the popular momentum stocks experienced significant volatility following their third-quarter earnings reports, released between Oct. 15 and Nov. 5. Only Apple (AAPL) continued to have the technical profile of a momentum stock.

Apple continued to set all-time intraday highs almost daily, including $111.43 on Wednesday, up 39% year to date.  For its part, Tesla Motors (TSLA) has outperformed -- up 66% year to date -- but is down 14% from its all-time intraday high set at $291.42 on Sept. 4.

The biggest year-to-date loser is Amazon (AMZN) , down 22%, and the stock has rebounded from a year-to-date low of $284.00 on Oct. 24.

Google (GOOGL) is virtually flat year to date and has been below its 200-day simple moving average at $573.53 since Oct. 9.

Netflix (NFLX) is up just 4% year to date and corrected 32% from an all-time intraday high at $489.29 on Sept. 9 to as low as $331.00 on Oct. 16, well below its 200-day simple moving average at $416.00.

Here are some trading strategies for these popular momentum stocks.

Apple ($111.25) traded as low as $95.18 on Oct. 15, and after beating analysts estimates Oct. 20 gapped above its 50-day simple moving average at $100.07 on Oct. 21. That propelled the stock to an all-time intraday high at $111.43 on Nov. 12, up 17% on this latest leg of the stock's momentum run-up.

As a pure momentum stock, Apple can continue to rise without a specific price target. The weekly chart for Apple is positive but overbought. When this is the case, investors should employ a sell stop below the key weekly moving average, which is rising at $104.93.

Amazon.com ($311.51) traded as low as $284.00 on Oct. 24 after the company reported an earnings miss on Oct. 23. This low tested key technical levels at $293.83 and $284.38 -- where momentum investors could have bought this stock on weakness.

Investors who bought this weakness should be selling strength to the 50-day and 200-day simple moving averages at $315.58 and $329.27, respectively. A close this week above a key weekly moving average at $310.34 shifts the weekly chart to positive, reflecting potential positive online holiday sales this season.

Google ($558.25) traded as low as $518.41 on Oct. 17, after the company reported an earnings miss on Oct. 16. This weakness gave investors the opportunity to buy weakness to a key technical level at $522.17.

Investors who took advantage of this buying opportunity should book profits on strength to the 50-day and 200-day simple moving averages at $570.91 and $573.53, which are now in a negative technical formation technicians call a "death cross." This technical negative can be offset by a positive weekly chart, which occurs if Friday's close is above its key weekly moving average at $562.41.

Netflix ($383.86) traded as low as $331.00 on Oct. 16 after reporting an earnings beat on Oct. 15, but with weaker-than-expected forward guidance. This gave investors the opportunity to buy this stock on weakness to a key technical level at $341.44.

Investors who bought this weakness should book profits on strength to the key weekly moving average at $406.90 with the 50-day and 200-day simple moving averages at $426.50 and $416.00.

Tesla Motors ($249.10) reported an earnings miss on Nov. 5, but the stock stayed above its 200-day simple moving average at $228.19, then traded up to and slightly above its 50-day SMA at $248.79.

Investors who bought Tesla at its 200-day SMA when it was $220.65 on Oct. 15 should employ a "good 'til canceled" limit order to sell strength to a key technical level at $286.05.

The buy at $220.65 occurred as the stock corrected 25% from its all-time intraday high at $291.42, set on Sept. 4 to the low of $217.32 on Oct. 15. The weekly chart is positive with its key weekly moving average at $244.36.

At the time of publication the author held no positions in any of the stocks mentioned.

Follow @Suttmeier

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.


TheStreet Ratings team rates APPLE INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate APPLE INC (AAPL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, revenue growth, notable return on equity and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

You can view the full analysis from the report here: AAPL Ratings Report

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