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Take Advantage of Earnings Volatility

NEW YORK ( TheStreet) -- Buy weakness to a value level or key moving average, or sell strength to a risky level or key moving average. This allows investors and traders to capture volatility both before and after earnings releases. All you need to do is enter GTC Limit Orders to buy weakness at a key level or to sell strength to a key level. Capturing volatility is the name of the game during every earnings season.

The majority of companies have been missing revenue estimates when reporting their third quarter results. As a result the number of stocks that are rolling into a negative weekly chart profile has been increasing. As stocks succumb to "QE fatigue" so do the stock's sector and the major equity averages.

On Oct. 29, while the stock market was closed because of the approach of Hurricane Sandy, I profiled eight stocks in This Week's Key Earnings Reports. Today I review how seven of these stocks performed versus their key levels. Only one of these stocks did not miss on the bottom line.

On Oct. 30, while the stock market was closed because of the wrath of super-storm Sandy, I wrote Trading Earnings Volatility, and today I provide updated profiles for six of these names.

Norfolk Southern (NSC - Get Report) ($60.99): Set a new 2012 low at $60.71 on Monday. Consider buying weakness to the 200-week simple moving average at $59.78 with weekly and semiannual value levels at $58.78 and $58.29. My monthly risky level is $66.41.

Boeing (BA - Get Report) ($70.41): Consider a buy-and-trade strategy on weakness to my monthly value level at $69.69.

Procter & Gamble (PG - Get Report) ($68.67): The weekly chart profile shifts to negative on a close this week below the five-week modified moving average at $68.61. My quarterly pivot is $70.38.

Under Armour (UA) ($53.00): Remains above its 200-day SMA at $50.26 but below its five-week MMA at $54.65. (AMZN - Get Report) ($234.33): The influence from weekly and semiannual pivots at $233.53 and $236.23 should keep the stock in a tradable range between $223.00 and $238.70.

Apple (AAPL - Get Report) ($584.62): Has been below its 200-day SMA at $592.91 for the past two days. In mid-June 2011 Apple spent just six days below this key moving average. This week's pivot has a high probability of being tested this week.
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AAPL $95.18 1.64%
AMZN $671.32 -1.83%
BA $132.49 -1.13%
NSC $89.14 -1.74%
PG $81.10 0.16%


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S&P 500 2,063.37 -18.06 -0.87%
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