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Trading Earnings Volatility

NEW YORK ( TheStreet) -- During earnings season, my writing focuses on earnings expectations vs. price action.

I profile key stocks to provide investors and traders with information and data that can be used judge how to "buy and trade" each stock both before and after its earnings release.

I provide value levels, pivots and risky levels, which are action levels at which to buy weakness or to sell strength using good-'til-cancelled limit orders. If you consider each stock as a horse, my analysis is your handicap sheet.

My theme this earnings season has been that the majority of companies would likely meet or beat EPS estimates but miss on the revenue line, and that some could issue weak forward guidance.

I shifted to a negative market outlook following the market-positive reaction to the release of the Federal Reserve's QE3 initiatives announced on Sept. 12. As stocks, sectors and the equity averages started to experience deteriorating technicals, I said declining prices were a contagion called "QE fatigue."

Today I outline how eight stocks performed vs. their technicals and key levels to see which stocks had "buy and trade" opportunities and which did not.

On Monday, Oct. 22, I profiled seven stocks in "Earnings, It's All About the Bottom Line." The first stock I review today was handicapped in that article.

The other stocks I am reviewing today were profiled on Tuesday, Oct. 23 in "Apple, Amazon Face Tougher Scrutiny Reporting Earnings."

Norfolk Southern (NSC - Get Report) ($62.77) missed on the revenue line and projected lower coal shipments through 2013. The stock gapped lower last Wednesday below my monthly pivot at $65.29 with an intraday low at $60.96. The 200-week simple moving average is a major support at $59.06. Weekly and semiannual value levels are $61.01 and $58.29, respectively, with a semiannual risky level at $68.50.

Boeing (BA - Get Report) ($71.11) beat EPS but missed on the revenue line. The stock opened higher last Wednesday at $74.95, which gave investors and traders the opportunity to reduce positions against my quarterly pivot at $74.54. The stock traded below my monthly value level at $71.27, which gave investors and traders the opportunity to buy back the shares sold at $74.95. The 200-week SMA and semiannual value level are $63.12 and $59.43, respectively, with a weekly pivot at $71.42 and a quarterly risky level at $74.54.

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PG $79.39 0.00%
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