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Trading Guidelines for Abercombie, Costco, 2 Others That Are Reporting

Stocks in this article: ANF COST FRED SAFM

NEW YORK (TheStreet) -- Today we crunch the numbers on four retail companies that will report quarterly earnings before the start of trading on Thursday.

Abercrombie & Fitch  (ANF) and Sanderson Farms (SAFM) have double-digit gains year to date. Costco (COST) and Fred's Inc.  (FRED) are lower, with Fred's down by double digits.

The profiles below provide trading guidelines for the stocks in two "crunching the numbers" tables that follow.

Abercrombie (ANF) ($36.66), up 11% for the year to date. Analysts expect the clothing retailer to report an earnings per share loss of 18 cents. The stock has been trading back and forth around its 200-day simple moving average since Feb. 26 with this moving average now at $36.64. The 2014 intraday high is $42.49 on March 5 with a subsequent low at $34.55 set on April 17.

The weekly chart is negative with its five-week modified moving average at $37.24 and its 200-week SMA at $47.07. Weekly and annual value levels are $35.56 and $29.88, respectively, with monthly and semiannual risky levels at $37.37 and $53.43, respectively.

Costco (COST) ($113.87), down 4.3% year to date. Analysts expect the operator of membership retail-oriented warehouses to report EPS of $1.09. The stock set an all-time intraday high at $126.12 on Nov. 25, and has been trading back and forth around is 200-day SMA now at $116.03 since Jan. 8. The stock traded as low as $109.50 on Feb 4 and as high as 117.47 on Feb. 28, and it's below its 200-day SMA.

The weekly chart is positive with its five-week MMA at $114.42 as the stock's 12x3x3 weekly slow stochastic is on the rise. Annual value levels are $112 and $97.60 with weekly and monthly risky levels at $116.62 and $121.42, respectively.

Fred's  (FRED) ($16.49), down 11% year to date. Analysts expect the retailer discount general merchandise chain to report EPS of 20 cents. The stock traded to a multiyear intraday high at $21.05 on March 3, and slumped to as low as $16.16 on May 21, below its 200-day SMA at $17.33.

The weekly chart is negative with its five-week MMA at $17.41 and its 200-week SMA at $14.40. Semiannual and annual value levels are $15.49 and $10.67, respectively, with a quarterly pivot at $16.98, and semiannual and monthly risky levels at $19.77 and $19.83, respectively.

Sanderson Farms (SAFM) ($87.01), up 20% year to date. Analysts expect the poultry processing company to report EPS of $1.64 which is up 10 cents from last Friday's estimate. The stock set an all-time intraday high at $88.78 on Tuesday and the stock above all five key moving averages in the first table.

The weekly chart is positive but overbought with its five-week MMA at $82.72 in a chart pattern that has the formation of a parabolic bubble. Monthly and quarterly value levels are $81.93 and $69.93, respectively, with a weekly pivot at $87.45 which was a magnet on Tuesday.

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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