This week’s earnings reports will be the next big test for the stock market and the focus is likely to be on the big banks, but Moneyshow’s Tom Aspray sees opportunities in those banks that drop if earnings disappoint.
The US stock index futures are a bit lower early Monday as they do not seem to be impressed by the 3% gain in the Shanghai Composite. Of course, the real test is likely to come from home as the market reacts to this week’s full slate of earnings reports.
Since the November, lows the Select Sector SPDR Financial (XLF) has been one of the star performers as it is up 13.6% versus just a 9.2% gain in the Spyder Trust (SPY). Both look positive technically though the financials stocks will be under the microscope this week.
Often times a close analysis of the technical studies will help warn one in advance of a stocks earning’s misses, but it can also help you spot which stocks to buy if they correct in reaction to their earnings. Two of the big banks that report earnings this week are outperforming the S&P 500 and look attractive for purchase at good support.
Chart Analysis: The weekly chart of the Select Sector SPDR Financial (XLF) shows the strong close above the resistance at line a, to start off the New Year.
NEXT PAGE: Two More Big Banks