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The Dow Earnings Season Mega-Chart

NEW YORK (TheStreet) -- The Dow Jones Industrial Average begins April trying to top its all-time intraday high at 16,588 set on Dec. 31, while the S&P 500 and Dow Transports set new all-time highs yesterday. I think the Dow would have already set a new high if the three stocks that were removed on Sept. 23 were still in this benchmark index.

Today's "Crunching the Numbers" mega-chart below profiles the 30 Dow components, plus three former members that were removed back on Sept. 23, 2013.

Analyzing the New Dow Components

Note that I define my technical terms just after the chart below.

Nike (NKE) ($74.39) already reported their quarterly results on March 20 and beat analysts' earnings per shar estimates by 3 cents, earning 76 cents a share. Their last quarter ended on February 28. Nike joined the Dow 30 on Sept. 23 and since then is up 7.7%, but is down 5.4% year-to-date. The stock has a negative weekly chart profile with its five-week modified moving average at $75.59. Nike is above its 200-day simple moving average at $71.89 with weekly and monthly risky levels at $78.84 and $85.50.

Goldman Sachs (GS) ($165.92) also joined the Dow on Sept. 23. Its share price is up just 3 cents since then. The stock is down 6.4% year-to-date. The stock has a negative weekly chart profile, with its five-week MMA at $166.45. Goldman is above its 200-day SMA at $164.22, which is also a quarterly pivot, with weekly and annual risky levels at $166.49 and $185.25.

Visa (V) ($214.70) also joined the Dow on Sept. 23. Its share price is up 9.6% since then. The stock is down 3.6% year-to-date. The stock has a negative weekly chart profile, with its five-week MMA at $219.09. Visa is above its 200-day SMA at $201.62, with weekly and monthly risky levels at $227.01 and $236.64.

All three new Dow stocks have negative weekly charts and have been totally outperformed by the three companies that were booted from the Dow on Sept. 23.

Analyzing the Dow's Ex-Members

Alcoa (AA) ($13.04) has a gain of 55.3% since leaving the Dow 30, and is up 22.7% year-to-date. Aloca has a positive but overbought weekly chart, with its five-week MMA at $12.01. It traded to a new multiyear intraday high at $13.18 on April 1.

Bank of America (BAC) ($17.34) has a gain of 22.3% since leaving the Dow 30. It is up 11.4% year-to-date. BofA has a neutral weekly chart, with its five-week MMA at $16.95. It traded to a multiyear intraday high at $18.03 on March 21.

Hewlett-Packard (HPQ) ($33.23) has a gain of 56.9% since leaving the Dow 30, and is up 18.8% year-to-date. Hewlett has a positive but overbought weekly chart, with its five-week MMA at $30.84. It traded to a new multiyear intraday high at $33.45 on April 1, with a semiannual risky level at $36.34.


Crunching the Numbers with Richard Suttmeier: Moving Averages & Stochastics

This table provides the technical status for the stocks profiled in todays report.

There are five columns with moving average titles: Five-Week Modified Moving Average, 21-Day Simple Moving Average, 50-Day Simple Moving Average, 200-Day Simple Moving Average and the 200-Week Simple Moving Average.

The column labeled 12x3x3 Weekly Slow Stochastics shows the pattern on each weekly chart with readings from Oversold, Rising, Overbought, Declining or Flat.

Interpretations: (Stocks below a moving average listed in red are below that moving average.)

Five-Week Modified Moving Average (MMA) is one of two indicators that define whether or not a weekly chart profile is positive, neutral or negative. The other is the status of the 12x3x3 weekly slow stochastic.

A stock with a positive technical rating is above its five-week MMA with rising or overbought stochastics.

A stock with a negative technical rating is below its five-week MMA with declining or oversold stochastics.

A stock with a neutral technical rating has a profile that is not positive or negative.

The 200-Week Simple Moving Average (SMA) is considered a long-term technical support or resistance and as a "reversion to the mean" over a rolling three to five year horizon. (Even Apple declined to its 200-week SMA in June 2013.)

The 21-Day Simple Moving Average is a short-term technical support or resistance used by many hedge fund traders to adjust positions. A stock above its 21-day SMA will likely move higher over a rolling three to five day horizon and vice versa.

The 50-Day Simple Moving Average is also a technical support or resistance used by many strategists and commentators in financial TV.

The 200-Day Simple Moving Average is another technical support or resistance and I consider this level as a shorter-term "reversion to the mean" over a rolling six to 12 month horizon. (Even Apple tested or crossed its 200-day SMA in nine of the last 10 years.)


Crunching the Numbers with Richard Suttmeier: Earnings & Where to Buy and Sell

This table presents the date of earnings and where to buy on weakness and where to sell on strength.

EPS Date is the day the company reports their quarterly results.

EPS Estimate is the earnings per share estimate from Wall Street analysts.

Value Levels, Pivots and Risky Levels are calculated based upon the last nine weekly closes (W), nine monthly closes (M), nine quarterly closes (Q), nine semiannual closes (S) and nine annual closes (A). I have one column for pivots, which is a magnet for the period shown. The columns to the left of the pivots are first and second value levels. The columns to the right of the pivots are first and second risky levels.

Note: Investors who wish to buy a stock should use a good-until-canceled GTC limit order to buy weakness to a value level. Investors who want to sell a stock should use a GTC limit order to sell strength to a risky level.

At the time of publication the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff

Richard Suttmeier is the chief market strategist at 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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