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Barnes & Noble to the Woodshed, Best Buy Beats Street

NEW YORK ( TheStreet) -- The retail-wholesale sector has been headlining earnings this week and this was the case for the retailers that reported quarterly results on Monday and Tuesday. All of the stocks profiled Monday in Home Depot, JC Penney, TJ Maxx Top Earnings News had buy ratings according to www.ValuEngine.com. After reporting earnings one stock had a moon-shot and was downgraded to hold. One stock was send to the woodshed and was upgraded to strong buy.

Traders and investors all but ignored the Nasdaq trading freeze on Thursday. It appears that the Nasdaq suffered a technical glitch that was called a connectivity issue that lasted for nearly three hours. Thursday's market rebound also ignored the ValuEngine valuation warning with 76.3% of all stocks overvalued 44.2% by 20% or more. The retail-wholesale sector is 24% overvalued and is one of nine sectors overvalued by more than 20%.

Today's closes are likely to keep the weekly chart profiles mixed for the five major equity averages. Dow Industrials and the S&P 500 are below their five-week modified moving averages at 15,306 and 1666.8 respectively. The Nasdaq, Dow transports and Russell 2000 are above their five-week MMAs at 3573, 6426 and 1026.03 respectively.

If we cannot confirm the early-August highs as cycle highs, new highs are likely in September. Here's the upside and downside in today's market pulse.

After Thursday's market strength the Nasdaq is down just 1.5% from its Aug. 5 multi-year high at 3694.18. The upside to my semiannual risky level at 3759 is just 3.3%. The downside to my annual value level at 2806 is 22.9%. This profile continues to justify having 50% of your investment dollars on the sidelines in cash.

[Read: <a target="blank" data-add-tracking="true" href="http://www.thestreet.com/story/12016636/1/gms-lagging-malibu-looks-to-second-chance-in-september.html"><em>GM's Lagging Malibu Looks to Second Chance in September</em></a>]

Here is today's earnings scorecard with my buy-and-trade parameters:

Best Buy (BBY - Get Report) ($35.20 vs. $30.37 on Aug. 16) beat EPS estimates by 20 cents a share earning 32 cents premarket on Tuesday. The stock closed Monday at $30.73 and gapped higher on Tuesday in a moon-shot to a multi-year high at $35.44 on Thursday. The upside price gap resulted in a downgrade to hold from buy according to ValuEngine. The stock is above my monthly pivot at $33.05, but the downgrade should be enough for buy-and-trade investors to consider booking profits.
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SYM TRADE IT LAST %CHG
BKS $25.96 0.66%
BOBE $51.05 0.43%
BBY $32.61 -0.37%
HD $111.13 0.53%
JCP $8.47 -0.47%

Markets

DOW 17,619.51 +23.16 0.13%
S&P 500 2,063.12 +5.48 0.27%
NASDAQ 4,986.8670 +28.3990 0.57%

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