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3 Big Stock Charts for Friday: Aetna Inc (AET), Facebook Inc (FB) and Visa Inc (V)

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All eyes are on the inauguration of Donald J. Trump this morning, but the market will quickly turn its focus back to business shortly after the pomp and circumstance has completed as expectations of executive orders and comments on various industries will give way to earnings expectations again as we prepare to enter the heaviest week of reporting for the quarter.

Shares of Aetna Inc (NYSE: AET ), Facebook Inc (NASDAQ: FB ) and Visa Inc (NYSE: V ) find their way towards the top of our list today, as each of these companies are displaying overbought or oversold signals just a short period of time before their respective earnings reports. This indicates potential opportunities for traders to position themselves to profit from the market's reaction to their quarterly results.

Visa Inc (V)

Shares of Visa have stalled at chart resistance after posting a short-term rally above their 100-day moving average. V shares recently broke through what is now likely to be a confluence of support as the 20-, 50- and 200-day moving averages for Visa stock hover a mere 2% below current prices.

Despite the bevy of potential support, V has now entered a consolidation phase that is likely to play out as sideways activity for the next two weeks ahead of the company's earnings announcement scheduled for Feb. 2.

The consolidation is likely to help Visa stock work off an overbought status that has signaled as V shares spent the last two weeks rallying more than 5%.

A consolidation ahead of the earnings announcement may be bullish for the short-term outlook for Visa shares. Historically, V tends to see rallies ahead of earnings announcements that often turn to "sell the news" reactions that take the stock lower, even after in-line reports. A sideways move, or even a decline ahead of earnings may signal an opportunity for nimble traders to jump into the stock and benefit from a positive reaction to the upcoming numbers.

For now, support lies in place at the $78-level, which may also provide for a timely launching pad for a post-earnings rally in the shares.

Facebook Inc (FB)

After a two-week rally of just less than 10%, Facebook shares are ready to take a rest to work off their recently triggered overbought indication just ahead of earnings on Feb. 1.

FB shares took off after spending an elongated period of trading at support from their 50-week moving average. The recent rally broke Facebook stock above all its key trendlines, while potentially overextending the short-term price pattern to a point where a short-term correction is required.

The current RSI reading above 70 is the first of its magnitude since just ahead of last quarter's earnings announcement when FB stock shed almost 15% over a three-week trading period. A pre-earnings sell-off would likely set the stage for the stock to be able to stage a rally from positive news instead of embark upon a "sell the news" reaction that would likely move shares significantly lower.

For now, watch for Facebook shares to move towards support at the $120-level, which is where the majority of support lies for FB. A decline to this level would potentially mark a buying opportunity ahead of the Feb. 1 earnings news.

Aetna Inc (AET)

All eyes will be on the Presidential Inauguration this morning as the market expects to begin to get real signs as to what the new administration holds for addressing the health care dilemma. Shares of Aetna have been on a steady decline since December. The decline accounts for a 12% drop in AET share value as many investors have grown concerned about the potential effects of the administration change on providers and insurance companies.

Putting the fundamentals aside, Aetna's chart shows that there may be a shorter-term opportunity to benefit from technical support that comes at the same time that some of the uncertainty around healthcare may be relieved.

AET shares are resting just above their 100- and 200-day moving averages at the same time that the company's stock has triggered an oversold signal from its short-term RSI indicator. The combination of trendline support and a potential vacuum of sellers is often a short-term bullish catalyst for stocks.

This situation indicates that Aetna shares are likely to see an imbalance of buying pressure enter the market if there is any potentially positive news, or even on a lack of bad news. For now, our charts suggest a relatively easy move to the $127-level with potential for AET stock to reach back to $130 over the next few weeks.

As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.

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The post 3 Big Stock Charts for Friday: Aetna Inc (AET), Facebook Inc (FB) and Visa Inc (V) appeared first on InvestorPlace .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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