American Water Works (AWK)
Why focus on a utility that isn’t reporting earnings this week? It’s because the biggest question of the week is where should you put your money when markets are in turmoil. Hence, we review American Water.
Do you want safety with a 2% dividend, a little international exposure, and no tariff implications? Then I give you Jersey’s finest, American Water Works Co, Inc. (AWK).
Technically, the stock is breaking out to new highs and trying to hold on. If this market sell-off is more prolonged, then this is a good place to hide out and is also a nice diversification for your portfolio. It won’t run like a tech stock, but the risk/reward set-up is favorable.
Use the $146 level to set stops on the downside with upside targets based on the breakout from this rounded bottom formation at roughly $175. The candle formation put in on Friday to close the week was not ideal but may be worth the risk given the volatility.
And if you like lagging indicators, a “golden cross” formed last week and is another technical reason to look positively on the stock.
Delta Air Lines (DAL)
Delta Air Lines (DAL) shares have nosedived 50% from its January peak as it heads into earnings week. Shares fell 16% when the company slashed its first-quarter outlook in early March.
Delta cited declining consumer confidence amid growing uncertainty over the economy, which resulted in weaker domestic demand. It cut its revenue guide to rise between 3% and 4% compared to an outlook of 7–9%.
Technically, the damage has been done. The stock has been oversold since March and is beginning to show a bullish divergence. In this case, price makes a new low but the RSI does not. Look for a break above 30 in the RSI as a buy signal.
The risk/reward is good but not great. DAL has tested and held a support area just above $35 going back to early 2024. A break and close below $35 and downside risk takes the price to $30.
A sharp V-shaped rally could happen with good earnings results and positive guidance. That’s a big IF, given the continued air of uncertainty. A small rally could see the stock get back to $44.
Historically the trends in the airline stocks last for months and are rarely neutral. Follow the trend higher if it changes. Otherwise, a landing lower is likely.
J.P. Morgan Chase
J.P. Morgan Chase (JPM) will be one of the most watched earnings of the quarter. Not only is it one of the largest weighted financial stocks in the world, but its CEO, Jamie Dimon, isn’t one to mince words.
Shares have fallen 25% from its February 9 peak as the market has corrected in the face of tariff uncertainty and a global trade war. Dimon has been somewhat quiet but is always one to give a great sound bite or two, come the conference call.
Technically, we have a problem
Shares have broken a 16-month uptrend. The stock price breached its 50-day moving average in March, then failed to recapture it—old support became resistance. After one successful test of its rising 200-day moving average, the stock broke through it last week with some vigor.
On a rally, look for that 200-day moving average at $228 to become resistance. The sellers are now in charge until something changes. To the downside, we have a target of $180 based on a head and shoulders topping pattern as outlined above.
