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How to Trade Earnings for Home Depot, Red Robin, Staples and More

Stocks in this article: HD MDT RRGB SPLS TJX

NEW YORK (TheStreet) -- We're crunching the numbers on five companies that report quarterly earnings before the opening bell Tuesday. One is a component of the Dow Jones Industrial Average but has been lagging that index.

The profiles below provide trading guidelines for the stocks in two "crunching the numbers" tables that follow on pages 2 and 3.

Home Depot (HD) ($77.36), down 6% year to date. Analysts expect the home improvement retailer and Dow component to report earnings per share of 99 cents. The stock set an all-time intraday high at $83.20 on Feb. 5 then traded as low as $74.61. It is now below its 200-day simple moving average at $78.04. The weekly chart is negative with its five-week modified moving average at $78.31. Weekly and semiannual value levels are $75.46 and $75.25, respectively, with semiannual and monthly risky levels at $81.82 and $84.13, respectively.

Medtronic (MDT) ($60.39), up 5.2% year to date. Analysts expect the medical technology company to report EPS of $1.12. The stock set an all-time intraday high at $62.90 on April 4 then traded as low as $55.85 on April 14, which was below its 200-day SMA, now at $57.04. The weekly chart shifts to negative with a close this week below its five-week MMA at $59.41. Semiannual value levels lag at $50.16 and $44.05, respectively, with a weekly pivot at $60.65 and quarterly and monthly risky levels at $61.93 and $63.89, respectively.

Red Robin Gourmet (RRGB) ($61.94), down 16% year to date. Analysts expect the chain of gourmet burgers to report EPS of 73 cents. The stock set an all-time intraday high at $86.83 on Nov. 5 and has since been in a downtrend trading as low as $60.04 on May 15, well below its 200-day SMA at $70.44. The weekly chart is negative with its five-week MMA at $67.03. Weekly and semiannual value levels are $61.02 and $51.28, respectively, with semiannual and quarterly risky levels at $64.49 and $71.07, respectively. With a tight weekly value level, note the risk to the downside given a negative reaction to earnings.

Staples (SPLS) ($13.24), down 17% year to date. Analysts expect the retail chain of office supplies to report EPS of 21 cents. The stock has been below its 200-day SMA since Jan. 9, trading as low as $11.04 on March 27. The high since than has been $13.50 on May 14, which is still below the 200-day SMA at $14.23. The weekly chart is positive with its five-week MMA at $12.60 and its 200-week SMA at $15.47. Staples has been below its 200-week SMA since March 2011. A quarterly value level is $10.14 with a weekly pivot at $13.40 and monthly and annual risky levels at $13.93 and $15.54, respectively.

TJX Companies (TJX) ($58.56), down 8.1% year to date. Analysts expect the parent of T.J. Maxx, Marshalls and HomeGoods to report EPS of 67 cents. The stock set an all-time intraday high at $64.38 on Jan. 13 then traded as low as $55.82 on Feb. 5, holding its 200-day SMA. The stock is currently just below its 200-day SMA at $58.94. The weekly chart is negative with its five-week MMA at $59.06. Weekly and semiannual value levels are $56.01 and $55.29, respectively, with semiannual and quarterly risky levels at $62.97 and $64.56, respectively.

Your investment policy among these stocks depends on whether or not you are a buyer on weakness or a seller of strength. We advocate using a good-'til-cancelled limit order to buy weakness to a value level or to sell strength to a risky level.

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