Earnings Drive Stocks; Momentum Investors Slow to Rebound

The heart of the earnings season has begun and investors are absorbing earnings from some of the largest companies in the S&P 500 index. Two of the three largest banks to already post earnings notched up results that were better than expected. Today, Coca Cola (NYSE:KO) reported results that were right in line with analysts’ expectations. After the closing bell, Intel (NASDAQ:INTC) , Yahoo (NASDAQ:YHOO) and CSX (NYSE:CSX) will release their results.

Traders watched developments surrounding Ukraine, and stocks moved higher even though anxiety about the tense situation with Russia sent buyers into oil. Gold prices reversed course on Tuesday as a stronger than expected retail sales report pushed the US dollar higher. Gold is now squarely resting on support near the 10-day moving average at1, 303. Oil prices remain robust, despite large then expected builds in inventory released last week by the Department of Energy.

Momentum stocks have had a difficult time gaining traction after declining sharply during March and the first half of April. Shares of the social network giant Facebook (NASDAQ:FB) somewhat bucked the trend and gained in pre-market trading after the Financial Times cited people close to the process in reporting the company was readying to join the mobile-payments competition by offering electronic-money services.

Shares of Facebook are finding support and could be poised to move higher. The mini head and shoulders pattern that is forming has created support near $56 dollars per share. Momentum on the stock is building as the MACD (moving average convergence divergence) index is poised to generate a buy signal. This occurs when the spread (the 12-day moving average minus the 26-day moving average) crosses above the 9-day moving average of the spread. The RSI (relative strength index) is moving higher with price action but still printing near 41, which is on the lower end of the neutral range.