Viacom (VIAB) - Get Report before Thursday's opening bell reported better than expected fourth-quarter earnings. This is a major accomplishment as (CBS) - Get Report and Viacom are set to merge again in early December.

Both stocks are too cheap to ignore. Viacom's p/e multiple is just 6.2, according to Macrotrends. At the same time its weekly chart shows a weekly slow stochastic reading below 10.00 on a scale of 00 to 100, which is my technical indicator for a stock being too cheap to ignore.

My call is to buy Viacom between its weekly value level at $19.83 and its monthly risky level at $23.75. Consider this a buy zone for the stock.

Viacom traded as low as $11.60 in November 2008 following the crash of 2008, then traded as high as $89.26 in July 2014.

Since then, the stock has declined to as low as $20.92, on Oct. 31. The stock thus rallied by a factor of seven from its 2008 low to its post-crash high, then fell 76% to its 2019 low.

Shorter term, Viacom closed Wednesday at $22.05, down 14% year to date and down 31% from its 2019 high of $31.96, set July 12.

The stock is up 5.4% from its Oct. 31 low of $20.92.

Here is the coverage of Viacom's earnings as reported by TheStreet.com.

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The Daily Chart for Viacom

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Courtesy of Refinitiv XENITH

The daily chart for Viacom shows the stock had a tradable bottom on Dec. 27. The close on Dec. 31 at $25.70 was an important input to my proprietary analytics, and its annual risky level is well above the chart at $53.55. The close of $29.87 on June 28 was another important input to my analytics, and its second-half value level is well below the chart. The close of $24.03 on Sep. 30 was an input to my analytics and its quarterly risky level is $29.38. The close of $21.56 on Oct. 31 was an input that resulted to its November risky level at $23.75. My weekly value level is $19.83.

The Weekly Chart for Viacom

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Courtesy of Refinitiv XENITH

The weekly chart for Viacom is negative but oversold, with the stock below its five-week modified moving average of $23.19 and well below the 200-week simple moving average or "reversion to the mean" at $33.27. The 12x3x3 weekly slow stochastic reading is projected to end this week rising to 14.96 from 10.75 on Nov. 8. The Nov. 1 level was 8.01, well below the 10.00 threshold making the stock technically too cheap to ignore.

Trading Strategy: Buy the stock between its weekly value level at $19.83 and its monthly risky level at $23.75. Reduce holdings on strength to its quarterly risky level at $29.38.

How to use my value levels and risky levels:

Value levels and risky levels are based upon the last nine monthly, quarterly, semiannual and annual closes. The first set of levels was based upon the closes on Dec. 31, 2018. The original annual level remains in play.

The close at the end of June 2019 established new monthly, quarterly and semiannual levels. The semiannual level for the second half of 2019 remains in play.

The quarterly level changes after the end of each quarter so the close on Sep. 30 established the level for the fourth quarter.

The close on Oct. 31 established the monthly level for November.

My theory is that nine years of volatility between closes are enough to assume that all possible bullish or bearish events for the stock are factored in.

To capture share price volatility investors should buy on weakness to a value level and reduce holdings on strength to a risky level. A pivot is a value level or risky level that was violated within its time horizon. Pivots act as magnets that have a high probability of being tested again before its time horizon expires.

How to use 12x3x3 Weekly Slow Stochastic Readings:

My choice of using 12x3x3 weekly slow stochastic readings was based upon back-testing many methods of reading share-price momentum with the objective of finding the combination that resulted in the fewest false signals. I did this following the stock market crash of 1987, so I have been happy with the results for more than 30 years.

The stochastic reading covers the last 12 weeks of highs, lows and closes for the stock. There is a raw calculation of the differences between the highest high and lowest low versus the closes. These levels are modified to a fast reading and a slow reading and I found that the slow reading worked the best.

The stochastic reading scales between 00.00 and 100.00 with readings above 80.00 considered overbought and readings below 20.00 considered oversold.

Recently I noted that stocks tend to peak and decline 10% to 20% and more shortly after a reading rises above 90.00, so I call that an "inflating parabolic bubble" as a bubble always pops. I also call a reading below 10.00 as being "too cheap to ignore."

Disclosure: The author has no positions in any stocks mentioned and no plans to initiate any positions within the next 72 hours.