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Everything posted by MongiIG

  1. Hi @NickW-uk Both of your requests have been submitted. All the best - MongiIG
  2. Post-earnings trade setups: Bellway, Tesla, and Barclays With Q3 earnings season in full swing, Bellway, Tesla, and Barclays provide us with potential trading opportunities. Source: Bloomberg Joshua Mahony | Senior Market Analyst, London | Publication date: Friday 22 October 2021 This article looks at some of the big movers off the back of recent earnings announcements, as we try to find stocks that provide potential trading opportunities. Typically, earnings announcements and trading statements will drive a shift or enhancement of market sentiment. While many see earnings as a significant risk when holding a stock, placing trades in the wake of such events allows for greater confidence that all market knowledge has been factored into current prices. Bellway Housebuilder, Bellway enjoyed a welcome 72% jump in pre-tax profits for the year to July. However, rising fuel costs and a shortage in delivery drivers has provided fears over further upside for building materials. Those factors remain a key issue going forward, with price falling back down towards a confluence of trendline and 61.8% Fibonacci support. While we could see further short-term downside, it makes sense to look at the wider uptrend and recognize that there is a good chance that this recent selloff represents a buying opportunity. That bullish trend holds unless price breaks back below the February low of £27.76. Source: ProRealTime Tesla Tesla managed to beat market expectations across the board, with supply chain concerns doing little to dampen sales. Chip shortages and higher costs across other materials were widely expected to hamper performance, but instead we saw a record $1.62 billion profits in the third quarter (Q3). This has helped drive the stock back up into the critical $900 record high established back in January. A break up through this level looks likely to leverage the stock into a fresh bullish phase, with the company clearly managing to finally overcome market expectations after years of missed targets. Source: ProRealTime Barclays Barclays has enjoyed a welcome boost from its investment banking division, with the Q3 profits of £1.45 billion coming in well above the £931 million expected. This has taken the stock into a fresh four-year high, with price looking to have finally brought a long-term downtrend to an end this year. This week’s push higher builds on the exit from a seven-month period of consolidation, with price looking to build on the March breakout. With that in mind, Barclays looks primed for a period of strength, as higher interest rates and a growing economy build a favourable outlook for the bank. A move back below £1.55 level negates that view. Source: ProRealTime
  3. Risk event for the week starting 25 October: ECB, BoJ rate meetings With the yen being one of the big trades recently, Daily FX’s Justin McQueen picks up a short EUR/JPY trade ahead of rate meetings at the ECB and Bank of Japan. The case is to see an unwinding of recent yen weakness. https://www.ig.com/uk/market-insight-articles/risk-event-for-the-week-starting-25-october--ecb--boj-rate-meeti-211022
  4. The global energy crisis explained In this article we break down the current global energy crisis and look at effects on commodity prices and inflation. Source: Bloomberg Commodities Energy crisis Energy Inflation Price World energy consumption Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Friday 22 October 2021 Global energy crisis explained What is the global energy crisis? The current energy crisis is a disruption in the availability and supply of energy resources to the large parts of the global economy, amidst increasing demand. Which regions are being affected by the energy crisis? Major economies such as the US, China, Europe and India are currently being affected by the global energy crisis. Why are these regions being impacted? There are varying reasons across jurisdictions which are contributing to the current crisis. Some of these issues are as follows: Energy demands globally have picked up as post-Covid-19 pandemic global economic recovery A cold winter and hot summer as well as an economic growth has equated to electricity shortages in China China now stockpiling domestic coal and gas reserves Russia has limited gas supply to Western Europe Low and diminishing coal inventory levels in India Much of Europe mainly use gas for heating, Europe is moving into winter and inventories are low Organisation of the Petroleum Exporting Countries (OPEC) oil production increase marginal not meeting expected future demand Supply chain or logistic disruptions to supply of natural resources How are energy prices reacting to the crisis? Fossil fuels which include coal, natural gas and oil still account for the vast majority of global energy needs. As demand outstrips supply we are seeing an exponential rise in these commodity prices. Year to date moves in these commodities as of 21 October is as follows: Brent crude oil: +63% Natural Gas: +101% Coal: +179% How can the energy crisis affect inflation and the broader economy? Higher energy costs feed into higher inflation across a broad basket of items directly and indirectly such as electricity, transportation, food etc. In the US alone (the world’s largest economy) we are seeing consumer price index (CPI) data highlighting inflation currently sustaining above 5%, where the US Federal Reserve bank (Fed) targets price stability at around 2%. Higher inflation if not transitory will pressure the tightening of monetary policy i.e. interest rates. Rising interest rates while aimed at stabilizing price inflation, can slow economic growth and in turn negatively affect employment. The below graph shows the monthly CPI inflation print since October 2020. Source: Tradingeconomics How long will the energy crisis last? It is uncertain as to how long the current energy crisis will persist. However, demand side assumptions for energy are higher in the colder months and the suggestion is that problems could in turn persist until at least the end of US and European winter this year. Supply chain bottlenecks which not only affect commodity prices but a whole host of goods in general, are likely to persist into the new year and at least the first quarter (Q1) of 2022. Brent crude technical analysis Source: ProRealTime Oil prices continue to grind higher in lieu of limited production increases amidst increasing demand and a global energy crunch underway. Brent crude while remaining in overbought territory still trades firmly within a strong uptrend. We continue to look for short-term corrections in oil to find long entry, with 86.50 and now 89.00 our longer-term upside targets. Natural Gas – technical analysis Source: ProRealTime The long-term trend for Natural Gas remains up. In the short term, a correction of this uptrend looks to have ended with a bullish price reversal (circled blue). The bullish price reversal is supported by the oversold indication on the stochastic indicator. These bullish indications in technical analysis terms favouring renewed gains with 6030 the initial upside resistance target. Traders who are long might consider using a close below the reversal low at 5000 as a stop loss indication for the trade. Summary A variety of factors including a post-Covid-19 pandemic economic recovery and supply chain disruptions are contributing to a global energy crisis at present These has equated to soaring energy costs globally Fossil fuels, which include oil, natural gas and coal account for the bulk of global energy demands and in turn prices have risen considerably The energy crisis is expected to continue until at least the end of 2021 Rising energy costs are further fueling inflationary concerns Higher inflation if sustained can weigh on global economic growth and employment through a more aggressive tightening of monetary policy
  5. Look ahead to the week starting 25 October: US earnings; ECB rates US tech earnings continue with Facebook, Microsoft, Alphabet, Twitter, Ford and Exxon reporting, while in the UK it’s on to banks. IGTV’s Jeremy Naylor discusses the week ahead with Chris Beauchamp, IG’s chief market analyst, who also looks at the European Central Bank's (ECB) rate decision. https://www.ig.com/uk/market-insight-articles/look-ahead-to-the-week-starting-25-october--us-earnings--ecb-rat-211022
  6. Charting the Markets: 22 October FTSE 100 & Dax still stalled but S&P 500 targets new record - also watching VIX and Nasdaq 100. In commodities we look at platinum, silver, iron ore and copper. And EUR/USD and GBP/USD on the rise. We also look at DXY and USD/CAD. https://www.ig.com/uk/market-insight-articles/charting-the-markets--22-october-211022 This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.
  7. Availability bias How does 'availability bias' affect traders? Availability bias is the tendency to open or close positions based on information that is easily available, rather than sources that are more difficult to find. It can cause traders to act on false or unverified information, which can lead to higher levels of risk and loss. Traders tend to lean towards what is personally most relevant, recent or emotional, even long after the event is over. The mind can take a shortcut based on examples that come to mind immediately, rather than on research and analysis. For example, if a person has a family member who recently lost money on a bitcoin trade, they may be less inclined to speculate on the cryptocurrency because it is hard for them to imagine that the market can be profitable. In fact, a study by Moradia, Meshkib and Mostafaei found that there is a strong correlation between judgement and data availability. By surveying investors of stocks listed on the Tehran Stock Exchange, the researchers concluded that decision-making would likely improve as the amount of information released to the public increased. How can traders prevent availability bias? The most common way to prevent availability bias is to conduct extensive research and analysis. Participants of IG's survey were comfortable using multiple sources to gather information on trading and investing. Although 56% used the internet, some also used newspapers, specialist publications, financial advisers, television and podcasts. Fundamental analysis is used to examine internal and external factors such as earnings reports, how the sector is performing, and the health of the economy, while technical analysis looks at historic price data and indicators to establish key entry and exit levels for each trade. If you don't feel confident enough to trade on live markets, you could test your strategy on a demo account first. This enables you to practise trading with indicators and test your strategy using virtual funds. Things to keep in mind...
  8. Alphabet targets record highs ahead of Q3 earnings A stellar year for the stock and for the company puts Alphabet in a strong position ahead of Q3 earnings. Source: Bloomberg Shares Alphabet Inc. Google Amazon Valuation Price Chris Beauchamp | Chief Market Analyst, London | Publication date: Friday 22 October 2021 When does Alphabet report earnings? Alphabet reports its fiscal third quarter (Q3) earnings on 26 October, after the market close. Alphabet earnings – what to expect Revenue growth for the search engine giant is expected to be 37%, to $63 billion dollars. Meanwhile, earnings per share (EPS) are expected to rise 43% to $23.44. Alphabet is up by two-thirds for the year, and is closing on the record high seen in late August and early September. Like many of the big tech firms, it has enjoyed an excellent year, and aside from the shakeout of September it has done so without much of the volatility of the Nasdaq 100. Cash flow from operating activities has yet to return to the highs of the fourth quarter (Q4) 2020 but it has recovered from first quarter (Q1) 2021’s dip, moving back to $21 billion for the second quarter (Q2). It’s not hard to work out where this comes from. Alphabet has nearly 30% of the globe’s digital ad spending, ahead of Facebook’s 25%. Meanwhile, rivals like Alibaba and Amazon only have shares in single digit percentages. Ad revenues have rebounded even as problems related to the Covid-19 pandemic and reduced ad spending have waned. Google Cloud’s revenues are growing as a segment too. Some firms have opted for Microsoft, but others who might have plumped for those of Amazon have swerved the temptations of Bezos, since they compete with him in the retail space. With the ad business providing the financial muscle, Alphabet can afford to give its cloud division the resources to exploit the expanding cloud market. Alphabet earnings – valuation and broker views Alphabet trades at 30 times earnings, which, looking at it over the past ten years, is quite reasonable. Google’s valuation has peaked at 66 times, and fallen to a low of 16 over that period. For a business that made over $36 billion for the first two quarters of the year, that does not seem too demanding. 49 analysts currently cover Alphabet stock. Of these, 17 have a ‘strong buy’, with 30 ‘buys’. One has a ‘hold’ and one lone soul views the stocks as a ‘sell’. The median target price is $3195, an 11% premium to the current price. Alphabet stock – technical analysis It is hard to fault the consistency of Alphabet’s performance this year. Until late September the 50-day simple moving average (SMA), current $2812, acted as support in any selloff, and even the September dop found support soon after the break below this indicator. The price hit the 100-day SMA (currently $2700) and then began to rally once again. The year has seen higher highs and higher lows, and with the price now back above the 50-day SMA a move back towards the September highs at $2940 seems likely. Source: ProRealTime Solid performer poised for further gains It’s hard to find much to dislike about Alphabet, at least from a pure investing perspective. Whatever concerns about its dominance in the search engine space, it continues to be defined by its strong position and its remarkable ability, like Amazon and Facebook, to produce plenty of cash.
  9. Gold prices rally as oil bounce weakens Gold is almost back at last week’s highs, while oil prices have slowed in their move higher. Video Source: Bloomberg Chris Beauchamp | Chief Market Analyst, London | Publication date: Friday 22 October 2021 Gold Markets fall three times faster than they rise, or thereabouts. This has been displayed nicely in gold, which has slowly clawed back last week’s losses. It is now looking at moving back above the 200-day simple moving average (SMA) of $1794 and then on above last week’s highs at $1800. Sellers will hope that the 200-day SMA holds back gains again, and that the new week sees gold retreat from this level and eat into the gains of the past four sessions. Source: ProRealTime WTI For the past two days oil has obstinately refused to roll over, with dip buyers coming in at $81. We might well be close to the end of this remarkable bounce, but what follows is tough to tell. A short correction could be enough to reset the clock here and provide room for further gains. We have not yet broken rising trendline support, so it is probably too early to suggest that a bearish move is at hand.
  10. FTSE 100 & DAX still stalled but S&P 500 targets new record Gains for European markets have been hard to come by this week, but US indices are still in strong form thanks to earnings season. Source: Bloomberg Chris Beauchamp | Chief Market Analyst, London | Publication date: Friday 22 October 2021 FTSE 100 The FTSE 100 continues to consolidate, refusing to move below 7200 even as a rally through last week’s highs eludes it. This leaves a move higher as still the most likely next move. A drop through 7150 would point towards a renewed move lower. Source: ProRealTime DAX Here too the index has held its ground well, refusing to move lower even as it remains stuck below trendline resistance and the 50- and 100-day simple moving averages (SMAs) of 15,568 and 15,602 respectively. Yesterday’s dip towards 15,400 found buyers, delaying any bearish turn lower. Bulls still need a move above 15,602 to break above trendline resistance and the aforementioned moving averages, in order to create a more bullish view. Source: ProRealTime S&P 500 After an interlude of seven weeks, the index has returned to its previous record high and now looks for further gains. Having marched higher for seven sessions the index remains in bullish form, completing its rebound from 4300, and with no sign of any retracement yet at hand. Source: ProRealTime
  11. British Pound (GBP) Price Outlook: November BoE meeting may see interest rates hiked. UK retail sales figures disappoint. UK October PMIs beat expectations. Bank of England chief economist Huw Pill has warned that inflation could top 5% in the coming months, leaving the central bank in a ‘very uncomfortable place’. In comments to the Financial Times, Mr. Pill said that the November 4 BoE meeting is now ‘live’ for a potential rate hike from its current rate of 0.1%. Mr. Pill joins BoE governor Andrew Bailey in warning of rising price pressures in the UK. While Mr. Pill’s hawkish tone on inflation should have boosted higher rate expectations, the market seems to be looking through this and instead is looking at his comments on the rates market. Mr. Pill said the market should take a more cautious approach to rate hike expectations saying ‘there’s a bit too much excitement in the focus on rates right now’. The market is now pricing in a 50/50 chance of a 25 basis point hike at November’s meeting, down from a 95% chance prior to Mr. Pill’s comments. Today’s UK data releases paint a mixed picture with retail sales in September missing expectations while Markit PMI data for October comfortably beat expectations and last month’s figures. IHS Markit highlighted that while the UK recovery regained momentum in October, supply shortages hit manufacturing growth while cost inflation reached a new record high. IHS Markit/CIPS Flash UK Composite PMI For all major data and event releases, see the DailyFX Economic Calendar. The British Pound is largely unchanged today against the US dollar, trading either side of 1.3800. Weekly resistance around 1.3835 should cap the upside in the short term, while a zone of support between 1.3710 and 1.3740 should hold today. GBP/USD DAILY PRICE CHART – OCTOBER 22, 2021 Retail trader data show 46.24% of traders are net-long with the ratio of traders short to long at 1.16 to 1.The number of traders net-long is 1.23% higher than yesterday and 14.99% lower from last week, while the number of traders net-short is 6.93% lower than yesterday and 5.96% higher from last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBP/USD prices may continue to rise. Positioning is less net-short than yesterday but more net-short from last week. The combination of current sentiment and recent changes gives us a further mixed GBP/USD trading bias. By Nick Cawley, Strategist, 22nd October 2021. DailyFX
  12. EUR/USD, EUR/GBP ANALYSIS & NEWS: Mixed Eurozone PMIs as Supply Chain Disurptions Remain a Key Issue. EUR/USD edging towards prior YTD low. EUR/GBP Bounces Off Weekly Low as BoE Tightening Bets Recede. PMI Recap: French October manufacturing PMI fell short of expectations at 53.5 vs 54 expected as supply chain issues remained a key feature once again. However, the services figure had been slightly better than consensus at 56.6 vs 55.5 expected with the composite reading matching consensus. Meanwhile, German PMIs saw a miss on the services front, with the manufacturing PMI coming ahead of expectations. Overall, Eurozone PMIs were slightly better than expected but not much in it. MIXED EUROZONE PMIS AS SUPPLY CHAIN DISRUPTIONS REMAIN A KEY ISSUE Source: DailyFX EUR/USD: A softer USD sees the pair back within close proximity to the prior YTD low (1.1662), which on two occasions has curbed further upside. Therefore, the weekly close will be important for the pair as failure to make a close above may renew downside in the pair. However, should EUR/USD make a firm break, eyes will be on the psychological 1.1700 handle. EUR/USD Chart: Daily Time Frame Source: IG EUR/GBP: Bank of England commentary continues to confuse markets over the timing of a potential rate rise. Overnight, Bank of England Chief Economist Pill noted that inflation could top 5% in the months ahead, however, the Chief Economist had more crucially urged caution over the exact timing of a rate hike having stated that there may be too much excitement in the focus on rates right now. In turn, market pricing for a 25bps rate rise at the November meeting has fallen from 95% probability earlier in the week to a 55% probability. As such, the cross has bounced back from its weekly lows and thus maintaining its 0.8420-60 range. By Justin McQueen, Strategist, 22nd October 2021. DailyFX
  13. EUR/USD and GBP/USD on the rise as USD/JPY eases back EUR/USD and GBP/USD continue their grind higher, while USD/JPY starts to ease back from a key historical resistance level. Source: Bloomberg Joshua Mahony | Senior Market Analyst, London | Publication date: Friday 22 October 2021 EUR/USD continues to consolidate within recent recovery EUR/USD has been on the rise of late, with the pair regaining lost ground in the wake of four months’ worth of declines. This tallies up with the shift into risk assets of late, denting demand for the dollar. Nonetheless, there is a strong chance we see the bears come back into play before long, with the recent 61.8% Fibonacci level providing the near-term resistance at 1.1667. That tallies up with the late-August low of 1.1663. As such, the current period of upside does look at risk given the wider downtrend. However, it may make sense to await a breakdown through trendline and swing-low support to bring that bearish picture into play once again. Until then, this short-term uptrend does still remain intact. Source: ProRealTime GBP/USD pushing higher as we head towards resistance GBP/USD has been on the rise over the course of October, with price continuing to push back towards the key 1.3913 swing-high. A break up through that level would bring an end to the wider downtrend in play. With that in mind, the recent push up towards that level is important for its wider context. For now we have a clear intraday trend of higher highs and lows. A break below the 1.3742 swing-low would bring about a fresh bearish outlook. Until then, further upside looks likely to continue as we push towards resistance. Source: ProRealTime USD/JPY easing back from long-term resistance USD/JPY has struggled to maintain its upward trajectory after rallying into the 2017 high of 114.73. The break below 113.87 support highlights the potential for a period of downside from here. From a wider context, further upside does look likely before long. However, there is a chance of short-term downside until 114.73 is broken. Source: ProRealTime
  14. Please see the expected dividend adjustment figures for a number of our major indices for the week commencing 25th October 2021. These are projected dividends and likely to change. IG cannot be held responsible for any changes made. Dividends highlighted in red include a special dividend, therefore some or all of the amount will not be adjusted. Amount in brackets is the expected adjustment after special dividends excluded (where shown on major indices). Dividend adjustments due to be posted on a bank holiday will usually be posted on the previous working day. If you have any queries or questions on this please let us know in the comments section below. For further information regarding dividend adjustments, and how they affect your positions, please take a look at the video. NB: All dividend adjustments are forecasts and therefore speculative. A dividend adjustment is a cash neutral adjustment on your account. How do dividend adjustments work? This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
  15. AUSTRALIAN DOLLAR, AUD/USD, US YIELDS, EVERGRANDE, RBA - TALKING POINTS The Australian Dollar saw early pressure before Evergrande made good. APAC equities moved higher on the news as sentiment turned positive. US yields rise as inflation fears grow. Will AU-US spreads drive AUD/USD? Overnight, S&P 500 hit a record high while US Treasury yields backed off 2 basis points from 5-month highs. US 2-year break-evens implied an inflation rate of 3.22% at one stage before settling back to 3.11%. Industrial metals pulled back from the recent highs. Evergrande avoided default by making a US$ 83.5 million bond coupon payment today, according to the Shenzen based Securities Times newspaper. Within the covenant of the bond is a 30-day grace period. Today’s payment was required 29 days ago. There are several more interest payments due in the coming weeks. Until this payment news came through, risk assets were under pressure. Snap (Snapchat) had reported disappointing earnings after the US close and gave a warning of slowing digital advertising. Other tech stocks declined on the news. The Evergrande headline saw risk assets attract some buyers. APAC equities were mostly higher on the day. The US Dollar dipped a little, Yen weakened a touch and the commodity linked currencies rose a fraction The Australian Dollar firmed on the news even as the RBA made an unscheduled bond purchase to defend its 3-year bond yield target of 0.10%. AUD 1 billion April 2024 of Australian government debt was bought. Ahead, Fed Chair Powell is due to take part in a panel discussion. US PMI numbers are also due out. AUD/USD TECHNICAL ANALYSIS The Australian Dollar traded at its highest level since July yesterday as short-term momentum took out the previous high of 0.74782. The 10-day and 21-day simple moving averages (SMA) have a positive gradient. The 10-day SMA crossed above the 100-day SMA which may indicate bullish momentum. Above the market, the 260-day SMA at 0.75347 could offer resistance. A move above that level might see bullish momentum further evolve. The price recently moved outside the upper band of the 21-day based Bollinger Band and has since moved back inside it. This is a possible bearish signal. The nearest support and resistance levels are the most recent low and high of 0.73788 and 0.75465 respectively. Chart created in TradingView Written by Daniel McCarthy, Strategist for DailyFX.com. 22nd October 2021.
  16. Early Morning Call: China stocks outperform; S&P hits all-time high and Snap shares plummet Europe expected to open up after SPX hits record high and INDU trades close to Wednesday’s record. Asia up as Evergrande pays delayed bond interest. Snap shares plummet on revenue drop blaming AAPL privacy changes. https://www.ig.com/uk/market-insight-articles/early-morning-call--china-stocks-outperform--s-p-hits-all-time-h-211022 This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.
  17. Hi Ut5 Thanks for reaching out. Unfortunately the web-based trading platform does not have profile chart. I will gladly forward your suggestion to our IT development team. All the best - MongiIG
  18. UBS and Blackrock upgrade Chinese equities after recent selloff Chinese equities show potential for a turnaround after Blackrock and UBS upgrades. However, the Evergrande issue should ensure further short-term volatility. Source: Bloomberg Joshua Mahony | Senior Market Analyst, London | Publication date: Thursday 21 October 2021 Chinese shares have been a big underperformer over the course of the past four months, with the CSI 300 losing 17% over the period going into yesterday’s low. With the seemingly inevitable default of property giant Evergrande coming back into focus today, there are still risks despite the sharp rebound yesterday. However, there are certainly some key players that see the recent slump as an opportunity to get long Chinese equities. Many will take confidence that the world’s biggest asset manager has decided to move back into Chinese stocks, while UBS has also shifted to overweight after 16-months at underweight. The CSI 300 weekly chart highlights how we have seen a drop back into the 200-week simple moving average (SMA) this week, with the recent pullback looking like another potential higher low. With the Evergrande issue still yet to be fully resolved, we are likely to see further volatility ahead. However, the fact that the Chinese government and regulators are taking actions to lessen the economic risks posed by overleverage could provide the basis of a bullish story for growth over the medium term. Source: ProRealTime
  19. Hi @Furlls Your request has been submitted. All the best - MongiIG
  20. Hi @Furlls Digital World Acquisition Corp has been added for share dealing. All the best - MongiIG
  21. Find out what to expect from Boeing’s earnings results, how they will affect Boeing share price, and how to trade Boeing’s earnings. Source: Bloomberg Shares Boeing Price COVID-19 pandemic Interest Interest rates Monte Safieddine | Market analyst, Dubai | Publication date: Thursday 21 October 2021 When is Boeing’s results date? The aerospace giant, Boeing is expected to report its third quarter (Q3) earnings on Wednesday, October 27, before the market open. Boeing share price: forecasts from Q3 results Last time around second quarter (Q2) results came as a big surprise, not just beating estimates sizably but posting its first quarterly profit in nearly two years thanks to gains in defense and services, its commercial airplanes division still losing money. Previous worries cited by its chief executive officer (CEO) included Covid-19 variants and labor shortages in its supply chain, unlikely the latter has fared any better and especially given complaints across the corporate spectrum, even if the worries regarding the former have subsided a bit with average cases dropping in the US and air travel restrictions to be reduced in November. It’s had quite a few items to contend with since, and taking a look at deliveries shows a modest increase to 85 commercial jets in the Q3 from 79 in the Q2 and 77 in the first. Digging a little deeper and that isn’t necessarily going to translate into rosier numbers, given the drop by a third in the high-value wide-body jets translating into less revenue from this aspect of the business. And while deliveries net are higher on the commercial jet front, they’ve declined on the defense, space, and security front from 43 to 37. The return to service of the 737 MAX in China is yet to be determined and in the hands of the country’s regulators, even if executives at Boeing are hoping it’ll be later this year, an item that’ll factor into future figures and guidance given the size of the world’s second largest airplane passenger market where a quarter of Boeing’s airplanes made its way to the Chinese market prior to the 737 MAX’s grounding. There’s also last week’s reports of a fresh defect in its 787 Dreamliner that’ll require undelivered planes to be reworked, while those already in service to be reviewed in what will be another cost to an already costly and tested model. Its space vehicle Starliner, will be delayed. But putting it all together for this quarter, and when it comes to the numbers, expectations are for a more subdued reading of -$0.16 per share, and for revenue close to last quarter’s expectations of about $16.5bn. Expect investors to tune in on how inflationary pressures and shortages have affected this sector, and whether it’s cash flow and debt situation hasn’t worsened, this as financial tightening is expected to occur at a faster pace globally to reign in prices, and test already tested companies heavily burdened with debt. Analyst recommendations aren’t as bullish as they were a few months back when there was a clearer majority buy bias on average amongst them, since then far more with a ‘hold’, far less with a ‘buy’ endorsement, and the net result a slight buy view (source: finance.yahoo.com), and an average price target still above current levels. Trading Boeing’s Q3 results: weekly technical overview and trading strategies From a technical standpoint, it’s been months of moves that have consolidated back towards the mean, keeping most of its technical indicators neutral and within close proximity with each other, the prices beneath its main short and long-term moving averages in both daily and weekly time frames, and in the bottom half of the Bollinger bands that in turn have been narrowed on what has been a lack of a proper breakout move, its long-term bear trend line visible on the weekly chart briefly breached but overall holding for the time being. That all translates into a technical overview that’s consolidatory but showing negative technical bias, with a move towards the mid-term support level that roughly coincides with the weekly second support level giving contrarian breakouts the advantage should the first support level fail to hold. Last time around the upside surprise in earnings lead to a big move, and if traders are less likely to be shocked this time around, then a push towards or past key levels to the upside might not be done with as much ease, else putting contrarian buy-breakout strategies into play. Current technical overview Consolidation - negative bias Technical overview conformist strategies Sell 1st resistance at/before price, buy 1st support after reversal Technical overview contrarian strategies Buy 1st resistance upon breakout from below, sell 1st support upon breakout from above S/L for 2nd resistance 241.77 2nd Resistance 237.59 S/L for 1st resistance 233.40 1st Resistance 229.21 Relative starting point 220.84 1st Support 212.46 S/L for 1st support 208.27 2nd Support 204.09 S/L for 2nd support 199.90 Source: IG IG Client sentiment* and short interest for Boeing shares When it comes to retail trader sentiment, it’s extreme buy and little changed since figures last quarter which were at 97%, little change from last week’s 99% long bias to 98% according to the latest reading. Its share price may have dropped since the start of last quarter, but the losses thus far have been far more contained than the Covid-19 pandemic’s plunge where its share price briefly lost more than two-thirds of its value. As for short interest (according to shortsqueeze.com), it has dropped since the last quarter where it was 9,410,000 shares to 8,100,000, representing about 1.5% of shares floated, slightly below the 1.61% seen in the last Boeing earnings preview. Source: IG * The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of today morning 8am for the outer circle. Inner circle is from the previous trading day.
  22. For more up to date news on how markets will open, the latest earnings and economic news, watch IGTV live in the platform at 07:30am UK. Today’s coverage: Indices: Europe expected to open up after SPX rose to a record high and INDU trades close to Wednesday’s record. Asia up as Evergrande pays delayed bond interest Equities: SNAP Q3, stk loses almost 30%, at one pt, on revenue drop blaming AAPL privacy changes. INTC fell 4%+ after its Q3. UK earnings LSE & IHG. US today AMEX & SLB FX: Watching GBP ahead of retail sales after consumer confidence falls to 8mth lows Commods: Copper crashes below 10k. Gold holds recent gains https://community.ig.com/igtv/
  23. Apple share price: Q4 earnings preview Apple Q4 earnings to be driven by iPhone 12 sales. Source: Bloomberg Shares Apple Inc. Price iPhone Revenue COVID-19 pandemic Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Thursday 21 October 2021 When are the Apple results? Apple Inc. the world’s largest company by market capitalization, is set to report quarter four (Q4) 2021 earnings on 28 October 2021. What ‘the Street’ expects from Apple Q4 2021 results? Apple Inc. no longer issues forward guidance for its quarterly results due to the Covid-19 pandemic, its effects on supply chains and in turn the uncertainty of future earnings. That being said, Apple has done very well through the Covid-19 pandemic period and has had a very strong year thus far. The follows on from the June quarter where revenue records were realized in each of the group’s geographic segments and double-digit growth was recorded in each of the group’s product categories. iPhone 12 demand is expected to be the primary driver of revenue and earnings growth, while iPhone 13 sales will only have a material impact on the next reporting quarter (Q1 2022). Markets will be hoping that forward guidance from the group is reinstated with a particular focus on how chip shortages could effect sales going forward. For the reporting quarter however, iPhone sales are suggested by JP Morgan to be within the range of 55 to 58 million units, equating to around $46 billion in sales. A consensus of estimates from Refinitiv data for the upcoming Q4 2021 Apple results arrive at the following: Revenue for the quarter of $84.8 billion Earnings per share (EPS) for the quarter of $1.23 How to trade Apple results In terms of an institutional view as of 20 October 2021, a Refinitiv poll of 42 analysts have an average rating of ‘buy’ for Apple, with a long-term price target (mean) of $168.35. Source: Refinitiv In terms of a retail trading view, as of 20 October 2021, IG Client Sentiment data shows 93% of IG clients with open positions expect the price to rise in the short term, while 7% expect the price to fall in the near term. Source: IG Apple share price – technical view Source: IG charts In our previous earnings preview note on Apple, we looked at the price breaking out of the bullish triangle formation. The move fell marginally short of the 160.50 projected target and the price has since retraced back to the 200 day simple moving average (SMA) displayed by the blue line. The ‘w’ shape below the 143.50 level is known as a double bottom formation in technical analysis terms. In context this pattern suggests that the correction or downtrend since the recent price high for Apple is now over. 160.50 continues to be our favoured upside target as the short-term trend now resumes up in line with the longer-term uptrend. Only on a move below the 200 day SMA currently at 135.80 would we reassess the merits of our long bias to trades on Apple. Summary Q3 2021 results are scheduled for 28 October 2021 Revenue for the quarter of $84.8 billion expected EPS for the quarter of $1.23 expected The average long term broker rating consensus for Apple is ‘buy’ 93% of IG clients with open positions on Apple expect the price to rise in the near term The long term trend for Apple remains up The short term uptrend for Apple has resumed
  24. Anchoring bias What is anchoring bias in trading? Anchoring bias is the tendency for traders to allow an initial piece of information to have a disproportionate influence on future decisions, regardless of its relevance. For example, research by Kaustia, Alho and Puttonen showed that individual's estimates of stock returns were significantly influenced by the starting value they were given – the 'anchor'. When participants were given a high historical stock return they were more likely to estimate that the future return would also be high, while a group given a lower initial value had far lower estimates. Anchoring bias can have dangerous consequences in trading, as it might mean that a trader holds on to an asset far longer than they should do, or that they make an inaccurate assessment of an asset's worth based on the anchor value. How can traders prevent anchoring bias? The best way to prevent anchoring bias in trading is by performing comprehensive research and analysis of the market to identify your own anchor. IG's study showed that only 28% of traders and investors used personal experience as a source of information. But by doing your own analysis of macroeconomic trends and historical data, you will be better placed to identify key support and resistance levels. It is important to have confidence in your own plan before you look at someone else's estimates – whether this is an analyst or fellow trader. Things to keep in mind...
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