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TheStreet Open House

Stocks Facing Risk of Sequestration Price Cuts

Another warning that may be developing is stock-specific earnings misses:

In 12 Sell Downgrades Threaten Dow Transports I profiled hold-rated FedEx (FDX) ($96.50 vs. $109.07 on March 18). FDX reported quarterly results pre-market on March 20 and missed EPS estimates by 15 cents a share earning $1.23 per share. The stock maintains its hold rating and fell below my monthly value level, now a pivot at $96.86. The 200-day simple moving average is a key level to hold at $93.02.

In Oracle Headlines Earnings this Week I explained that the earnings bar was high for Oracle (ORCL) ($32.30 vs. $35.69 on March 20).

Oracle earned the expected 63 cents per share for its fiscal third quarter, but missed the higher expectations I mentioned at 66 per share.

The stock was up against a solid resistance at its May 2011 high at $36.50 with my monthly pivot, now a risky level at $35.61. ORCL still has a buy rating and is above its 200-day SMA at $31.97 and semiannual value level at $31.89. The stock is also between my annual value level at $30.81 and my annual pivot at $34.68.

On Monday, I will evaluate some of the buy-rated stocks in the most overvalued consumer staples sector. On Tuesday, I will dissect the buy-dated stocks that underpin the Dow Industrial Average. Then on Wednesday, I will profile five stocks that report quarterly results on Thursday.

At the time of publication the author held no positions in any of the 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 www.ValuEngine.com 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 RSuttmeier@Gmail.com.
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