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Aluminum Beat Fried Chicken in Earnings Game Last Week

NEW YORK ( TheStreet) -- Last week I provided my buy-and-trade profiles for 12 companies in two posts. Last Monday I wrote, http://www.thestreet.com/story/12060698/1/key-earnings-this-week-aluminum-discount-retailers-and-restaurants.html and the aluminum company was the only winner as discount retailers swooned and the eateries were sent to the earnings woodshed. The owner of Kentucky Fried Chicken continued to report problems in China.

On Tuesday I wrote, JPMorgan, Wells Fargo Headline Earnings and the two 'too big to fail' banks continued to have the accounting flexibility to beat EPS estimates despite cutting back their mortgage origination businesses. A grocery store chain missed EPS estimates but the stock popped on plans that they were shutting down all stores in Chicago.

In sum these reports reflect that economic issues are evident as consumer confidence slumps, but increased sales of new cars increased demand for aluminum. Consumers are buying fewer items at the discount retailers and eating less at casual dining restaurants.

Even after the strong market rebound last Thursday and Friday only three stocks out of the 10 that reported were higher on the week, with one about unchanged and six traded lower as their disappointing earnings trumped the positive market reaction to the elusive debt ceiling compromise in Washington.

Here's Today's Earnings Scorecard:

Alcoa (AA - Get Report) ($8.32) beat EPS estimates by 5 cents earning 11 cents in afterhours trading on Tuesday. The stock gapped above its 50-day SMA at $8.07 on Wednesday and traded above its 200-day simple moving average at $8.37 on Thursday and Friday, but ended the week below this key average. The hold rated stock has a weekly value level at $8.07 with a semiannual risky level at $11.33.

Costco (COST - Get Report) ($115.90) missed EPS estimates by 6 cents earning $1.40 premarket on Wednesday. The stock opened lower trading down to $110.15 staying above its 200-day SMA at $109.23 then rebounded on Thursday and Friday to $116 on the euphoria of a potential agreement on the debt ceiling in Washington. The buy rated retailer has a semiannual value level lat $103.24 with a weekly and month risky levels at $118.37 and $118.92.

Fastenal (FAST - Get Report) ($47.31) missed EPS estimates by a penny earning 40 cents a share premarket on Wednesday. The stock was taken to the earnings woodshed with a gap below its 50-day and 200-day SMAs at $48.07 and $48.80 to a low at $45.85. The buy rated stock from the retail-wholesale sector does not have a value level with a monthly pivot at $48.88 and weekly and semiannual risky levels at $51.46 and $53.43.

Family Dollar (FDO - Get Report) ($69.71) beat EPS estimates by 2 cents earning 86 cents a share premarket Wednesday. The discount retailer fell to a week's low at $67.40 staying well above its 200-day SMA at $63.81. The buy rated stock has an annual value level at $49.09 with weekly and semiannual risky levels at $71.91 and $73.03.

JPMorgan (JPM - Get Report) ($52.51) lost 17 cents a share but after a $7.2 billion adjustment for legal fees beat EPS estimates by 14 cents earning $1.42 a share premarket on Friday. This 'too big to fail' bank was trading around its 200-day SMA at $50.82 on Wednesday and opened higher following this report to a day's high at $53.35 before dipping to the 50-day SMA at $52.60. The hold rated bank has a semiannual value level at $50.37 with a weekly pivot at $51.32 and monthly risky level at $55.71.

Micron (MU - Get Report) ($16.84) missed EPS estimates by 2 cents earning 21 cents a share in afterhours trading Thursday. The semiconductor stock opened lower on Friday trading down to $16.56. As a huge red flag ValuEngine has a strong sell rating on the stock following the setting of a multi-year high at $18.85 last Monday. My quarterly value level is $15.46 with a monthly risky level at $18.11. In my Tuesday post I described the stock as a parabolic bubble.

Ruby Tuesday (RT - Get Report) ($6.12) missed EPS estimates by 21 cents reporting a loss of 26 cents a share in afterhours trading on Wednesday. This stock was already in the woodshed but was slammed again to a low of $6.09 on Friday. The sell rated retail-wholesale stock has a quarterly value level at $4.60 with a weekly risky level at $6.83.

Safeway (SWY) ($33.75) missed EPS estimates by 6 cents earning 10 cents a share premarket on Thursday. Investors reacted positively to this negative news because the supermarket company announced that they were closing 72 Dominick's stores in Chicago by the beginning of 2014. The company is also selling its Canadian assets. The stock popped from a Wednesday close at $30.80 to a new multi-year high at $33.91 on Friday. The hold rated retailer has a quarterly value level at $29.50 with a weekly pivot at $33.24.

Wells Fargo (WFC) ($41.43) beat EPS estimates by 2 cents earning 99 cents a share premarket on Friday. The stock opened lower but returned to the unchanged line at the close. This hold rated 'too big to fail' money center bank is above its 200-day SMA at $39.18 My weekly and semiannual value levels are $40.82 and $40.04 with a monthly risky level at $44.97.

YUM! Brands (YUM) ($67.00) missed EPS estimates by 8 cents earning 85 cents a share in afterhours trading on Tuesday. Again the company reported issues at its KFC locations in China and the stock made a return visit to the earnings woodshed with a Wednesday low at $64.92 after gapping below its 200-day SMA at $69.17. The stock still has a buy rating but without a value level. My weekly pivot is $68.84 with a semiannual risky level at $73.12.

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 is the chief market strategist at AlphaPlus Analytics in addition to ValuEngine.com. He has been a professional in the U.S. Capital Markets since 1972, transferring his engineering skills to the trading and investment world.

Suttmeier has an engineering degree from Georgia Tech and a Master of Science degree from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. He became the first long bond trader for Bache in 1978, and formed the Government Bond Department at LF Rothschild in 1981, helping establish that firm as a primary dealer in 1986. This experience gives him the insights to be an expert on monetary policy, which he features in his newsletters, and market commentary.

Suttmeier's industry licenses include, Series 7 and Registered Principal (Series 24). He has been the Chief Market Strategist for ValuEngine.com since 2008 and often appears on financial TV.

Click here for details on Suttmeier's "Buy and Trade" investment strategy.

Richard Suttmeier can be reached at RSuttmeier@Gmail.com

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