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TheStreet Open House

Investing Ahead of Earnings: Alcoa Kicks Off the Reporting Season

Stocks in this article: AA BBBY STZ WDFC

NEW YORK (TheStreet) - Last week's volatile ride for the major equity averages set a shaky stage as first-quarter earnings season begins on Tuesday.

The Dow Industrial Average and S&P 500 set all-time intraday highs at the open on Friday at 16631.63 and 1897.28, and then closed below Thursday's lows, which are key reversal days. The S&P tested its monthly risky level at 1895.6 and then pulled back. The Nasdaq and Russell 2000 now have negative weekly charts.

Today's Crunching the Numbers tables assess the four stocks profiled below. After the profiles, the first table provides five important 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.

Alcoa (AA - Get Report) ($12.63, up 18.8% year to date): Analysts expect the aluminum producer to report earnings per share of 5 cents after the closing bell on Tuesday. The former Dow component traded at a multiyear intraday high at $13.18 last Tuesday, which is above this week's weekly risky level at $12.94 and the monthly risky level at $13.01. That implies that the stock won't set a new high in reaction to earnings.

The weekly chart is positive but overbought with its five-week modified moving average at $11.93. Semiannual and quarterly value levels at $12.33 and $9.34.

Bed Bath & Beyond (BBBY - Get Report) ($69.22, down 13.8% YTD): Analysts expect the retailer of household items to report earnings of $1.60 per share after the closing bell on Wednesday. The stock plunged below its 200-day simple moving average at $73.19 on Jan. 9, following a disappointing fourth-quarter earnings report, and traded as low as $62.12 on Feb. 3.

The weekly chart is positive with its five-week MMA at $68.36. The stock stayed below its semiannual risky level at $82.61 as the year began and traded below its annual value level at $64.99 at the 2014 low, which was a buying opportunity. The stock's monthly pivot at $69.31 should be the dividing point between a positive and negative reaction to earnings.

Constellation Brands (STZ) ($84.33, up 19.8% YTD): Analysts expect the beverage maker to report earnings of 76 cents a share before the opening bell on Wednesday. The stock traded at an all-time parabolic intraday high at $85.91 on Tuesday, which was a test of this quarter's pivot at $85.81, where investors could have reduced positions pre-earnings.

The weekly chart is positive but overbought in a parabolic bubble pattern with its five-week MMA at $81.51. If the bubble pops, the risk is to semiannual value levels at $58.42 and $49.57. Weekly and monthly risky levels are $87.41 and $91.33.

WD 40 (WDFC) ($75.66, up 1.3% YTD): Analysts expect the lubricant maker to report earnings of 67 cents a share after the closing bell on Tuesday. The stock set an all-time intraday high at $79.31 on Dec. 24 and challenged that with a high at $78.77 last Wednesday. The in-between low was $66.75 on Feb. 3.

The weekly chart is positive with its five-week MMA at $74.58. The recent high was a test of our quarterly risky level at $77.66 with a weekly risky level at $79.88 and this range suggests that the stock will not see a new high following earnings. Semiannual and annual value levels lag at $68.50 and $65.

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