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Trading Earnings Volatility

Stocks in this article: NSC BA AMZN PG

AT&T (T) ($34.63) beat EPS but missed on the revenue line. The stock opened lower last Wednesday and trades between my annual value level at $31.07 and my quarterly risky level at $36.39.

Procter & Gamble (PG) ($69.44) beat analysts' estimates and reported that it was on track to cut 5,700 jobs by year-end. The stock popped to $70.83 at last Thursday's open, allowing investors and traders to reduce positions at my quarterly risky level at $70.38. The 200-day SMA and semiannual value level are $65.60 and $61.55, respectively, with my quarterly pivot at $70.38 and weekly and annual risky levels at $70.92 and $78.47, respectively.

Under Armour (UA) ($52.15) beat EPS, matched on revenue, but lowered guidance, and the stock gapped lower on last Thursday's open, trading down from $55.50 then down to $50.03 last Friday vs. its 200-day SMA at $49.80. Below the 200-day is my semiannual value level at $42.68. Weekly and quarterly risky levels are $54.17 and $60.84, respectively. (AMZN) ($238.24) missed on both EPS and on revenue. I saw Amazon trade as low as $205.25 in after-hours trading vs. the 200-day SMA at $217.17. This helped stabilize the stock. Amazon wants to be viewed as a growth stock, and the market agreed. The stock recovered to $238.71 on Friday, as my semiannual pivot at $236.23 provided a magnet. Investors and traders who are bullish on Amazon could have taken advantage of this volatility. My weekly and quarterly risky levels are $251.63 and $263.71, respectively.

Apple (APPL) ($604.00) missed on EPS with a modest beat on the revenue line. I saw Apple trade as low as $589.00 in after-hours trading last Thursday, staying above its 200-day at $587.85. Apple returned to its 4:00 p.m. EDT close at $609.54, and then traded as high as $614.00 on Friday. Apple traded as low as $591.00 on Friday, staying above the 200-day, which was a buying opportunity for investors and traders who still like the Apple story. My semiannual value level is $481.73 with weekly and quarterly risky levels at $632.23 and $674.21, respectively.

Merck (MRK) ($46.15) missed revenue estimates before the market opened last Friday. The stock opened at $45.79 and traded up to $46.76. The trade is between my monthly value level at $44.52 and my weekly risky level at $47.25.

At the time of publication, Suttmeier had no positions in stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Richard Suttmeier has an engineering degree from Georgia Tech and a master of science from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. In 1981 he formed the Government Bond Department at LF Rothschild and helped establish that firm as a primary dealer in 1986. Richard began writing market research in 1984 and held positions as market strategist at firms such as Smith Barney, William R Hough, Joseph Stevens, and Rightside Advisors. He joined in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs a "buy and trade" investment strategy and can be reached at
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