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Mega-Chart! Regional Bank Earnings Season

NEW YORK (TheStreet) -- Earnings season begins next week, and by the end of April, all 24 components of the KBW Banking Index (BKX) will release their earnings results for the first quarter of 2014.

My latest coverage of the banking index was posted on March 24 in "Regional Banks Spike Higher On Passing Fed's Stress Test." At that point, 19 of the 24 components of the banking index participated in the Federal Reserve-mandated stress tests. The results were released on March 21.

Zions Bancorp (ZION) ($31.69, up 1.4% since March 21) was the only bank that did not pass the stress test. This stock set a multiyear high at $33.33 on March 20, in anticipation that it would pass the test. Weakness to $29.38 on March 27 was a test of its 200-day simple moving average at $29.40. The weekly chart is neutral, with the five-week modified moving average at $30.81 with declining stochastics. Quarterly and monthly value levels are $30.70 and $29.25 with semiannual risky levels at $32.58 and $35.11.

On Wednesday, I provided an earnings calendar when I crunched the numbers for the 30 components of the Dow Industrial Average . The only member of the regional banking index in the Dow is JPMorgan Chase (JPM), which reports quarterly results a week from Friday, along with another "too big to fail" money-center bank, Wells Fargo (WFC). The other "too big to fail" money-center banks, Bank of America (BAC) and Citigroup (C), report quarterly results on April 16 and April 14 respectively. Both are former Dow components.

Today's Crunching the Numbers tables profile the 24 components of the banking index. The first table provides the five major moving averages and stochastic readings. The second table provides earnings estimates, value levels at which to buy on weakness and risky levels at which to sell on strength.

Bank of America ($17.23, down 1.9% since March 21) traded as high as $18.03 on March 21 after passing the Fed Stress Test. It then fell to its 50-day simple moving average at $16.87. The weekly chart shifts to negative, with a close on Friday below its five-week modified moving average at $16.93. This week's pivot is $17.02.

Citigroup ($48.24, down 3.7% since March 21) is below four of five key moving averages in today's table, with the 200-week SMA the key level to hold at $40.30. The weekly chart is negative, with its five-week MMA at $48.74, with a monthly value level at $46.06. A semiannual pivot is $48.06, with weekly and quarterly risky levels at $49.64 and $49.61.

JPMorgan Chase ($60.48, up 0.5% since March 21) traded as high as $61.48 on March 25 after passing the stress test, and this week's risky level is $61.45. The weekly chart is positive, with its five-week MMA at $58.75. Monthly and quarterly value levels are $56.06 and $54.47.

Wells Fargo ($49.76, up 1.3% since March 21) set an all-time intraday high at $49.97 on March 21 after passing the stress test. This week's pivot is $49.45. The weekly chart is positive but overbought, with its five-week MMA at $48.49. Quarterly and monthly value levels are $47.33 and $46.67.


Crunching the Numbers with Richard Suttmeier: Moving Averages & Stochastics

This table provides the technical status for the stocks profiled in today's 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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