HSBC Holdings, a multinational investment bank, is in focus this month as Q4 2020 earnings are due. The investment industry has suffered from low rates across the developed world and thus was forced to look for higher yields in riskier assets and markets.
When Does HSBC Report Q4 Earnings?
The earnings for the last quarter of the previous year are expected on the 16th of February together with the full annual results for the year. Investors will focus on a possible change as the bank reported weak earnings in the previous quarter. For example, after-tax profit, revenue, and net income –all declined in Q3 2020 when compared to a similar period in the prior year. The COVID-19 pandemic took its toll on HSBC’s business as it did on the entire investment banking sector.
Market Expectations from HSBC Earnings Statement
According to Nasdaq’s estimates, HSBC is expected to report $1.34 EPS for the quarter, with the lowest forecast being $1 and the highest $1.67. If the company’s earnings fall anywhere within this range, it will be a positive given the poor earnings released previously.
HSBC Share Price – Technical Analysis
HSBC’s share price has consolidated since December 2020. Given the tight range and the shape of it, the consolidation looks like a triangular pattern waiting for a breakout. Symmetrical contracting triangles usually form as continuation patterns, often interpreted as pennants.
A pennant has a measured move given by the distance the price traveled prior to the consolidation area. By taking that distance and projecting it from the upper edge of the triangle, the target for the HSBC share price is much higher than the current market level.
What is the Outlook for the HSBC Share Price?
Aggressive traders may want to place a pending buy stop order or to wait for the price to break and close above the highs seen in December. The projected target given by the pennant formation suggests a move to $550 and beyond, but that should take some time and patience.
Conservative traders may decide to trade only the triangle’s measured move. In this case, traders should still wait for the breakout and target the longest segment of the triangle projected from the upper edge. Any solid improvements in revenue and net income may be just the trigger the price waits for ending the recent consolidation.