Prepare for an earnings avalanche.
Half of the Dow Jones Industrial Average and nearly a third of the S&P 500 are set to report their quarterly results this week, including top companies Apple, Facebook, Microsoft and Amazon.
Craig Johnson, chief market technician at Piper Sandler, has his eye on one name with earnings on tap.
"The name that stuck out to us was General Electric," Johnson said Friday on CNBC's "Trading Nation," a stock he said has implied volatility as high as 7% post-earnings. "The chart itself, when you unpack that, you can see you've got a clear series of higher lows that are now getting made, a downtrend reversal starting to happen, it looks like a pretty good risk reward setup and something we'd want to trade in here to the upside."
GE is the best performer in the XLI industrials ETF over the past three months, climbing more than 30%. It is set to report Wednesday.
"We just focus on what the price action is telling us and we try to strip out the noise. That's the great thing about looking at charts is we're not going to get bogged down with all of the news, the negative sentiment," said Johnson. "Let the charts tell us where we think it's going to go. It's the best discounting mechanism out there."
Michael Binger, president of Gradient Investments, said three other stocks are ones to watch heading into a busy reporting stretch.
"The first one is Lockheed Martin," Binger said during the same segment. "It's had a good run but we think that can continue, especially for Lockheed Martin whose earnings are going to grow at 12% this year. It only trades at 17 times so that's a bargain in this market."
Compared with Lockheed's roughly 17 times forward multiple, the S&P 500 trades at nearly 19 times. Lockheed shares are up 52% for the past 12 months. The company is scheduled to report Tuesday.
"The second name that I like going into earnings — and this is one that hasn't moved a lot in the past year, year and a half — and that's Amazon," said Binger.
Amazon has added barely 1% this year, half the gains of the S&P 500. It is up 12% for the past 12 months. Binger said a continued shift to e-commerce and Amazon's success in its server business should drive earnings going forward. Amazon is set to report on Thursday.
"Then the third one is a software company. It's called ServiceNow, it's had a nice run, it's not the cheapest stock in the world but these companies they tend to exceed estimates," Binger said. "They're in the business of providing productivity software and in a low unemployment environment I think that's in high demand by enterprises."
ServiceNow has added 30% for past three months. The company is scheduled to report earnings Wednesday.
Disclosure: Gradient Investments holds ServiceNow, Amazon and Lockheed Martin.
