US stock futures point to a slightly higher open Monday, just below resistance in the SPDR S&P 500 ETF (SPY) at $134.00. Last week we saw major strength return to the market on account of stellar earnings reports from a series of tech bellwethers. Intel Corporation (INTC
), Yahoo! Inc. (YHOO
), International Business Machines Corp. (IBM), and most notably Apple Inc. (AAPL
) had great quarters, boosting investor confidence. This week earnings season will continue and we will see if corporate profits continue to provide a glimmer of hope for this slow recovery.
Last week we saw Netflix, Inc. (NFLX
) break out to new highs once again after mentioning it several times in the Morning Call. Netflix reports after the close today, so most active traders will look to take profits on the trade into earnings. With highly valued stocks like NFLX, even a slight miss can trigger a sharp sell-off.
During earnings season, it is always best to trade stocks that have strong reports (that may sound simple). But even stocks that gap up big following strong reports are usually primed for a second move as long as they hold the initial earnings gap. One such candidate for a follow-through move is VMWare, Inc. (VMW
). VMW was one of the strongest stocks in the market for the better part of two years, but in 2011 has been in the dog house a little bit. However, a stellar quarter from the virtualization leader has sent the stock back to all-time highs. Watch VMWare above last Wednesday's high.