A week removed from being hacked on Twitter, this week will see Elon Musk and Bill Gates once again headlining the news cycles, but for different reasons. 

This week, markets anticipate the release of second quarter earnings from Tesla and Microsoft. As well as Twitter, where the accounts of the above founders were the target of hackers.

Since experiencing huge falls in March, U.S. indices (led by tech stocks)  have recovered close to pre-pandemic highs, in some cases surpassing them.

So with earnings out this week, will tech rallies continue, or will recent highs turn into lows?

This week’s stocks to watch

To the surprise of many, the NASDAQ has not only recovered from the lows in March, it has also surpassed pre-pandemic highs.

Here are the stocks to watch this week that could influence how the pendulum continues to swing.

1. Tesla

Earnings out – Wednesday 22nd July
Tesla has been the “bull of the year” in 2020 so far not many would argue. The Elon Musk led company has seen its share price gain close to over 200%. However as we are set to peak under the hood for its Q2 numbers, the question many are asking is, is it currently overpriced? In May, with prices at $710, Musk tweeted the below.

Prices since then have doubled, and now sit at $1,500. If Musks’ tweet was foreshadowing this week’s earnings release, could the Q2 performance see some recent bulls turn into bears?

As seen on the chart, the RSI shows that although the markets have gained quite significantly in the last 4 months, the markets are still not overbought, relative to previous volumes on the indicator.

2. Microsoft

Earnings out – Wednesday 22nd July
Although Bill Gates is no longer at the helm at Microsoft, the company he founded has so far performed strongly during the COVID-19 pandemic.

Prior to the pandemic, the record high price of a share in the tech giant was roughly $191 in early February. However as the coronavirus outbreak began, and global cases started to rise, the share price fell to $132.50. The markets now trade at $206, after reaching a record high of $216 last week.

So what next?

Barclays and Jefferies believe this could be heading to as high as $234.

Similar to Tesla, the RSI indicator still suggests more upside still exists, however will the markets consolidate first before a new rally?

Eliman Dambell

Senior Market Analyst
edambell@tvmarkets.com