Stock Market

We all know what the focus is on Wednesday: The Fed. The Federal Reserve is forecast to raise interest rates by 25 basis points today and the action has been well-telegraphed by the Fed in recent weeks. However, it’s a busy week and that has us looking at some hot stocks for tomorrow.

On Thursday, we’ll hear from a number of big tech companies. Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) and Amazon (NASDAQ:AMZN) will all report earnings after the close.

Tomorrow we’ll also get interest rate decisions from the Bank of England and the European Central Bank.

So what are the other hot stocks for tomorrow — Thursday? Let’s look.

Hot Stocks for Tomorrow: Meta (META)

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Source: Chart courtesy of TrendSpider

Alongside some of the big tech earnings this week, Meta (NASDAQ:META) will actually get the ball rolling on Wednesday evening. What does that mean for investors?

Well, after navigating a day likely filled with Fed-induced volatility, investors will have to gear up for earnings. We didn’t hear good things from Snap (NYSE:SNAP) and Match Group (NASDAQ:MTCH), but will Meta be any different?

The stock has enjoyed a nice rally lately but has struggled tremendously over the last 18 months. A rapid increase in spending (for metaverse-related infrastructure) combined with a decline in digital ad spend has pinched the company’s top and bottom lines.

Shares have now rallied for three straight months and are currently 67% off the 52-week low. At the low, META stock was down 77% from its all-time high. While 16 times this year’s earnings may seem cheap, earnings came down a lot this year and are forecast to fall again in 2023.

The Chart: Meta stock has had a nice run lately, but recently ran into the declining 200-day moving average. On a bullish reaction, the stock needs to clear $155, opening the door to $160 and $167, respectively. On the downside, bulls want to see META stock hold a pullback to the $137 area.

Apple (AAPL)

Click to Enlarge

Source: Chart courtesy of TrendSpider

As previously mentioned, most of Big Tech will report earnings on Thursday evening. While this group has been under pressure over the past year, the trio of Apple, Amazon and Alphabet still weigh in with a combined market capitalization of $4.58 trillion.

To say this group could be market-moving is an understatement — particularly if they all move in unison. For what it’s worth, the market has been rather forgiving thus far when it comes to lackluster or mediocre reports. Seeing how the market treats Meta tonight may give a clue on how they’ll treat the others on Thursday.

The biggest of the three and arguably the most closely followed among investors is Apple.

Bulls argue that the company’s robust balance sheet, high-margin Services unit and holiday quarter will be enough for the company to power higher on earnings. Plus, there’s been no negative pre-announcement.

Bears will argue that supply chain headaches and lower iPhone demand will weigh on the quarter and impact management’s outlook. We’ll find out soon enough who will be right.

The Chart: On the upside, bulls need to see Apple clear the recent high near $147, then resistance near $150. Above $150 and they can focus on $156.50 to $157.50 (the latter being the fourth-quarter high). On the downside, ideal support is near $138 to $140. However, a break of $135.50 is concerning, as it technically opens the door back down to the lows.

Hot Stocks for Tomorrow: Amazon (AMZN)

Click to Enlarge

Source: Chart courtesy of TrendSpider

I don’t mean to exclude Alphabet, because what the company has to say about search and digital ad spending is important. However, Amazon will help give investors a better idea about consumers.

Consumer spending has remained pretty strong despite concerns about an economic contraction. That said, inflation has remained stubbornly high. Even though consumers were paying for necessities, online shopping trends were favorable through the holidays.

More important than the holidays though will be management’s outlook. How does Amazon Web Services (AWS) look and how are consumers spending so far one month into the year? These will answer a lot of important questions for investors, both for Amazon and tech as a whole.

While I don’t necessarily mean to make today’s piece all about big-cap tech, it’s hard not to when they all report earnings.

The Chart: Amazon stock is ramming right into the $102.50 level, which was a key support in mid-2022, then resistance in the fourth quarter. A rally above this level puts the $109.77 gap-fill in play, along with the 200-day moving average. On the downside, bulls want Amazon stock to hold the 10-day moving average but need it to hold $91.

On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.

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