Should you buy Microsoft and Google before earnings?

Should you buy Microsoft and Google before earnings?

What will happen?

Two stock giants – Microsoft and Google – will publish earnings reports for the first quarter of 2021 on Tuesday after the market closes. Microsoft will release their financial results after midnight on April 27 at 00:30 (formally April 28) MetaTrader time (GMT+3), while Google at the midnight. By the way, the stock market is open from 16:30 to 23:00 MT (GMT+3).

What to expect?

Google is expected to deliver $15.45 earnings per share, while Microsoft – $1.76.

Should you buy Microsoft and Google before earnings? - 1

How to trade on earnings?

Check the economic calendar at the time of release to compare the actual data with the estimate.

  • If the earnings come out better than expected, the stock price will move up.
  • In case of worse-than-forecasted earnings, the stock price will move down.

Microsoft outlook

Microsoft hit an all-time high yesterday, breaking above $260.00. Therefore, the way up to the next round number of $270.00 is open. Since expectations are high, Microsoft is rallying up even ahead of the earnings report. Forecasts are bullish, thus the stock is likely to keep climbing up. However, the RSI indicator is just below the 70.00 level. Once it breaks above this level, the stock becomes overbought and the reverse down may occur. Thus, be aware of the support levels at the low of April 14 at $255 and the psychological mark of $250. If the stock price goes down, it is likely to stop ahead of these levels rather than break out them.

Should you buy Microsoft and Google before earnings? - 2

Google outlook

Analysts forecast that Google is likely to beat market estimates as its main source of profit – the advertising segment – recovered. Let’s look at the chart. If earnings are encouraging, Google may rise to the next round number of $2400, but the RSI indicator went above 70.00, signaling the overbought conditions. Therefore, the rally up shouldn’t last long. Support levels are at the recent low of $2250 and the 50-day moving average of $2140.

Should you buy Microsoft and Google before earnings? - 3

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Kseniia Medik

Financial market analyst of FBS. With a strong background in finances and investments, Kseniia has a deep knowledge of the Forex market.