Airbnb
We talked about signs that the consumer may be tiring last week. Airbnb (ABNB)’s earnings results today back up that theory.
For the quarter, the company beat analyst revenue and earnings per share (EPS) expectations as the travel industry has remained strong. That said, Airbnb management issued a forecast that fell short of expectations as they expect inflation and the economy to slow their business.
This message has been heard from several other consumer discretionary companies this earnings season including Uber this morning.
Airbnb shares are trading 7% lower in early evening trading, breaking through the bottom of the stock’s recent trading range.
Long-term support for the stock should slow its decline at $142. A break below that critical price will target further declines to $125
Robinhood
Robinhood (HOOD) stock is trading higher after the company’s blow-out earnings results.
Shares are trading 6% higher in after-hours trading as the company reported robust operational results for the last quarter. Revenue came in 40% better than this quarter last year while EPS beat expectations by $0.12, the company’s best earnings beat since November 2022.
Robinhood shares find themselves in a technical slingshot as the earnings report hits the wire. Shares crossed back above their 20- and 50-day moving average during today’s trading. This comes after shares traded in a tight range for the last month.
The technical surge higher is likely to continue as shares are moving above their top Bollinger Band. This indicator measures the potential for a stock to trigger a fast and aggressive move, in this case to $20 and above.
Arm Holdings
Shares of semiconductor company Arm Holdings (ARM) are trading 7% lower after today’s close.
The stock’s earnings and revenue results were better than the market’s expectations and management raised their outlook for the next quarter. So what’s up with the stock?
Investors have been buying the stock hand over fist heading into the earnings report, which created a “buy the rumor” situation… something that I’m tiring of writing this earnings season.
ARM’s chart tells the story of a perfect “sell the news” situation.
The stock rallied right to its short-term 20-day moving average - what I refer to as the “Trader’s Trendline” - over the last week. At the same time, the stock’s 50-day moving average turned bearish on April 22, which sets a strong headwind for the stock to move higher against.
Tomorrow morning’s opening trade may see ARM stock trading below the psychologically critical $100 adding even more pressure to the stock.
Target a move to $80 unless we see widespread buying in the tech sector.
One sidenote: Keep this particular “buy the rumor” example in mind as Nvidia (NVDA)’s earnings approach in a few weeks as Nvidia is another semiconductor company with exceedingly high expectations.
About the Author
Chris Johnson (“CJ”), a seasoned equity and options analyst with nearly 30 years of experience, is celebrated for his quantitative expertise in quantifying investors’ sentiment to navigate Wall Street with a deeply rooted technical and contrarian trading style.