Monday kicks off the busiest week of the earnings season.
Some of the blockbuster names to report include Apple, Microsoft, Alphabet, Facebook, Amazon and Tesla – those six alone make up nearly $10 trillion in market cap. Altogether, roughly a third of the S&P 500 will release results.
"I'm going to be watching four stocks very specifically," Craig Johnson, chief market technician at Piper Sandler, told CNBC's "Trading Nation" on Friday, pointing to Microsoft, Apple, Amazon and Alphabet. Those four stocks represent 20% of the entire weight of the S&P 500."
How those four stocks move post-earnings could spur more gains for this market rally or derail it, Johnson warned. While the S&P 500 made highs as recently as Friday, the broader Russell 2000 has not broken records since mid-March. That suggests narrowing breadth to Johnson, giving outsized influence to those mega-cap stocks that are driving the rally on the benchmark S&P.
"Those four mega cap stocks are really going to be key to see whether this market continues to keep pressing ahead because we already know the earnings estimates look great and a narrative of 'peak everything' is kind of floating around among investors right now. So we continue to hope that these numbers are going to be great on the top and bottom line," said Johnson.
Apple, Alphabet and Microsoft will report on Tuesday and Amazon on Thursday.
Chad Morganlander, portfolio manager at Washington Crossing Advisors, sees a knockout season for the S&P 500, though. Of the roughly one-quarter of S&P 500 stocks that have reported so far, earnings have risen 78% and come in more than 17% above estimates.
"It's going to be exceptionally strong, not only on the top line with revenue growth but also on the bottom line EPS numbers. All eyes though will be on future expectations, and we think that management is going to guide in a positive way for future demand," Morganlander said during the same interview.
As for risks, Morganlander said to be wary of higher input costs and a labor shortage that could squeeze operating margins, though that could show up in results later this year.
He said to stick with high quality stocks with strong balance sheets to hedge against that risk — stocks that fit the bill include Microsoft, Alphabet and Pepsi.
"Stay with companies that are consistently growing, consistently profitable, and well capitalized with very little debt. That should keep you in good stead," Morganlander added.
Disclosure: Washington Crossing Advisors holds GOOGL, MSFT and PEP.