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TheStreet Open House

KB Home, Lennar, AutoZone, CarMax Headline Earnings Preview

NEW YORK (TheStreet) -- A dozen companies of interest will report earnings this week. Today I provide my 'buy and trade' parameters for six that report on Tuesday or Wednesday. Three are buy-rated stocks in the retail-wholesale sector, one is a buy-rated stock in the computer and technology sector and two are sell and strong-sell rated homebuilders in the construction sector.

I continue to give the retail-wholesale sector an overweight rating as 79.8% of all stocks are rated buy. Two of the three sell auto parts, which has been a hot industry lately.

The computer and technology sector has an overweight rating with 47.4% of all stocks in the sector rated buy. Today's company is an original equipment manufacturer located in Tampa Bay, Fla.

The construction sector has an underweight rating with 60.2% of all stocks rated sell or strong sell, which are the ratings of the two homebuilders profiled today.

On Friday the stock market gave up some of the strong gains achieved following the release of the Fed statement last Wednesday afternoon. The Nasdaq has been the mojo leader and ended last week above monthly, semiannual and weekly pivots at 3772, 3759 and 3749 and set a new multi-year high at 3798.76 on Friday.

The new all-time highs are 15,709.59 Dow Industrials set on Wednesday, 1729.86 S&P 500 on Thursday, 6754.81 Dow transports on Friday and 1080.49 Russell 2000 on Wednesday.

If the Nasdaq stays above its three pivots the upside potential elsewhere is to semiannual risky levels at 16,490 Dow Industrials, 1743.5 S&P 500, 7104 Dow transports and 1089.42 Russell 2000.

This week's value levels are 14,927 Dow Industrials, 1667.5 S&P 500, 3749 Nasdaq, 6530 Dow transports and 1042.79 Russell 2000.

Quarterly and annual value levels remain at 14,288 / 12,696 Dow Industrials, 1525.6 / 1348.3 S&P 500, 3284 / 2806 Nasdaq, 5348 / 5469 Dow transports, and 863.05 / 809.54 Russell 2000.

One of the six stocks previewed in this post is undervalued but only one is overvalued by more than 20%, One stock is down 4% over the last 12 months, while four gained between 13.0% and 70.9%. Four of the six are trading above their 200-day simple moving averages, which reflects the risk of reversion to the mean.

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