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TheStreet Open House

Apple, DuPont and Ford Top Earnings Profiles

NEW YORK (TheStreet) -- Last week was rough for stock market traders and investors as the Dow Industrial Average led the five major averages lower. Dow Industrials closed at 15,879 on Friday, 709 points below the all-time intraday high at 16,588.25 set on the last day of 2013. Dow transports set an all-time intraday high at 7591.43 last Thursday then closed Friday at 7259 down 332 points from the high in just one day.

If this downside volatility continues my pre-earnings buy-and-trade profiles become even more important as guidance for traders and investors. This week there are many companies reporting results and I begin my analysis with bellwether Apple (AAPL) which reports after the close today. Then tomorrow premarket we hear from Dow component DuPont (DD) and automobile manufacturer Ford Motor (F).

Stock market weakness plus a lower 30-Year Treasury bond yield reduced the percentage of stocks overvalued to a still extremely elevated 81.3% down from 85.3% from Thursday. The percentage of stocks overvalued by 20% or more declined to 44.5% from 52.7%.

The technicals for the five major averages remain overbought on their weekly charts but only the Nasdaq ended last week above its five-week modified moving average at 4105. Dow Industrials, the S&P 500, Dow transports and Russell 2000 have thus been downgraded to neutral. Weekly closes below all five-week MMAs with all 12x3x3 weekly slow stochastic readings declining below 80.00 signals the end to the bull market for stocks, and the equities bubble will finally pop.

Apple ($546.07): Analysts expect the company to earn $14.04 a share afterhours today. Apple represents the computer and technology sector which is 35.4% overvalued with an overweight rating as 51.6% of the 1125 stocks in the sector have buy or strong buy ratings according to www.ValuEngine.com. Apple ended last week fractionally below its 50-day simple moving average at $546.56 with the 200-day SMA at $482.16. The weekly chart is neutral with the stock above its five-week MMA at $540.83 with declining stochastics and its 200-week SMA at $431.96. Apple has a buy rating is 9.5% overvalued with a gain of 21.2% over the last 12 months. Weekly and annual value levels are $539.55 and $517.05 with a monthly pivot at $549.13 and an annual risky level at $586.06. To view must-see charts read my post from Friday, Apple and IBM Have Must-See Charts.

Caterpillar (CAT) ($86.17): Analysts expected the company to earn $1.28 a share premarket today. The heavy equipment company reported earnings of $1.54 share. Caterpillar represents the industrial products sector which is 25.7% overvalued with an underweight rating as 30.5% of the 338 stocks in the sector have sell or strong sell ratings. The stock traded to a 2014 high at $93.20 on Jan. 15 then slumped to $85.88 on Friday between its 200-day and 50-day SMAs at $85.39 and $87.23. The weekly chart is negative with the stock below its five-week MMA and 200-week SMA at $88.15 and $88.60 with declining stochastics. Caterpillar has a hold rating is 15.6% overvalued with a loss of 10.8% over the last 12 months. My monthly value level is $85.71 with a quarterly pivot at $87.52 and weekly and annual risky levels at $92.17, $95.79 and $97.90.

DuPont ($59.97): Analysts expect the company to earn 55 cents a share premarket Tuesday. DuPont represents the basic materials sector which is 11.7% overvalued with an underweight rating as 64.1% of the 387 stocks in the sector have sell or strong sell ratings. The stock traded to a 2014 high at $65.00 on Tuesday then declined to $59.95 on Friday between its 200-day and 50-day SMAs at $57.97 and $62.22. The weekly chart is negative with the stock below its five-week MMA at $62.20 with declining stochastics and its 200-week SMA at $49.71. DuPont has a hold rating is 16.1% overvalued with a gain of 24.8% over the last 12 months. My annual value level is $51.35 with quarterly and monthly risky levels at $62.86 and $64.09.

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