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The 4 Rules of Earnings Season, Plus Tips: Buy Under Armour Next Week, Dump Amazon A.S.A.P.

If you're stuck in Under Armour, I think your prospects are much brighter than with Amazon. But don't expect the price decline to bottom before Monday. It normally takes two or three days for an earnings disappointment similar to Under Armour's to become fully discounted. The sweet spot to buy on the dip is late Monday or Tuesday for a more conservative entry.

Amazon's problem is it doesn't generate a return on investment. I've written many articles about the perils of buying momentum stocks lacking a meaningful return on investment. The only thing keeping the shares above $200 right now is a belief that someday it will monetize its revenue. Everyone worth their salt knows that it's easy to generate lots of revenue in retail if you're willing to sell at the lowest cost. But the moment a retailer tries to increase margins, sales fall off a cliff.

I suggest taking advantage of up days as an opportunity to scale back or exit.

At the time of publication, Weinstein had no positions in any of the securities mentioned.

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

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