US OPEN: Intel beats Q4 earnings forecasts on strong demand

3:59 PM 24 January 2020

  • US futures point to a green open on Wall Street

  • US500 with potential head and shoulders pattern?

  • Intel (INTC.US) surprises with earnings on solid demand from data-centers

US equities are poised to start the day higher, based on current futures quotes. Intel, American Express and Walt Disney are among major US companies that make moves in the pre-market trading. The US economy calendar is light today with PMIs being the only important readings being scheduled for release (2:45 pm GMT).

S&P 500 (US500) has almost fully recovered from a drop started on Wednesday and is closing in on an all-time high. However, one should keep in mind that in case the US index was to reverse and decline, a potential head and shoulders pattern with a neckline at 3310 pts would surface on the chart. Target of such a pattern would point to a decline towards Yesterday’s low at around 3300 pts. Source: xStation5

Intel (INTC.US) released a very strong earnings report for Q4 2019 yesterday after Wall Street session closed. The US tech company saw its quarterly revenue rise above the $20 billion mark for the first time in history. Adjusted EPS came in at $1.52, marking a 20% beat! The company explained that stellar results can be explained with a strong demand coming from the cloud data-center segment. However, what seems to be more important is that the company expects strong demand to continue throughout 2020. Intel expects full-year 2020 revenue to come in at around $75 billion. Such a reading would mark a $3 billion, or 4.2%, increase against 2019 results. 

Intel (INTC.US) was on the rise over the past half a year and is poised to open higher today, thanks to a solid earnings report. The stock could jump above the 127.2% exterior retracement ($64.10) at the launch of the session. Should it be the case, investors could look towards the next resistance in line - 161.8% exterior retracement at $69.90. The nearest support can be found at the zone ranging below $69. Source: xStation5

American Express (AXP.US) reported earnings for Q4 2019 ahead of the opening bell. Adjusted EPS of $2.03 was slightly higher than expected $2.01. Revenue of $11.4 billion also was a minor beat. Total Q4 expenses dropped 66% YoY to $2.6 billion. The US payments firm said it has added 11.5 million new proprietary cards in full-2019 and has continued to enjoy solid billings growth. The company said that it expects full-2020 EPS to fall in the $8.85-9.25 range (median estimate $8.95) and revenue to grow by 8-10%. 

Disney resort in Shanghai has been shut as attempts are undertaken to stop the spread of the coronavirus. The resort will remain shut until further notice. Walt Disney (DIS.US) owns 43% stake in the resort. Keep in mind that Lunar New Year is one of the busiest periods at the themed park.

Disney (DIS.US) has been trading in a short-term downward channel since November 2019. The stock may be set to retest support zone at 50% Fibo level of the upward move started at the end of September 2019 ($140 area). Note that this zone saw price reaction in the final quarter of 2019. On the other hand, should bulls regain control, 38.2% Fibo at $143.50 could be at risk. Source: xStation5

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