Avis Budget Earnings Preview: CAR stock needs strong guidance for next rally

Avis Budget Group Inc. (CAR) is releasing earnings on Monday after the Wall Street market close. The rental car company is expected to post revenue of 2.14 billion for the first quarter of 2022, while the consensus EPS that the market awaits is at 3.54. Both figures are considerably below the Q4 2021 numbers (2.57B, 6.62 EPS), but the CAR stock price seems to already have adjusted for these lower expectations in the past week. CAR shares have declined 16.2% since hitting a swing high at $323.78 on April 21.

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Avis Budget Stock News: Can car-rental sector profit from 'normal' summer? 

Avis Budget Group bulls will be looking for positive forward guidance from the company management, led by CEO Joe Ferraro since early 2020, on the earnings conference call. Car rentals should pick up ahead of what is expected to be the first regular northern hemisphere summer since the covid pandemic struck, which should be bullish for CAR shares.

CAR stock is nearing a key inflection point area where either it could find support for another leg up of break down and look for lower interim bottom levels. Let's look at the Avis Budget stock price chart.

Avis Budget Stock Forecast: CAR trying to bounce off 20-SMA

CAR stock daily price chart

Avis Budget stock is in the midst of a retracement of a two-month rally that topped on April 21 swing high at $323.78. CAR stock has closed five of the last seven trading days in the red. The stock just dipped below the 20-day Simple Moving Average on Friday, which provided a small bearish hint ahead of the earnings call. 

If Avis Budget earnings results don't convince bulls and CAR stock is unable to recover above this indicator, look for CAR to target lower Fibonacci retracement levels at $253.73 (38.2%), $232 (50%), and $210.09 (61.8%) where support could be found.

On the other hand, a positive conference call from Avis with strong results would allow CAR shares bulls to go back into action and keep capitalizing on what's been a very profitable stock to own in the past two years. First resistance is located at $281.08 (23.6% Fibo) and then the previous swing high at $323.78 would come into play next. Above there, November 2 2021 all-time daily close high at $358.67 hit after the huge Avis Budget earnings from Q3 2021 would be the next level in line.