NEW YORK (TheStreet) - Today we crunch the numbers on four retail-oriented companies and one homebuilder that reports quarterly earnings before the start of trading on Wednesday.
Michael Kors (KORS) is the only stock of the four with a year-to-date gain, up by a double-digit percentage. Two of the laggards are down by double-digit percentages. This individual stock volatility is the main reason investors need to be aware of the pre-earnings profiles we provide.
The profiles below provide trading guidelines for the stocks in two "crunching the numbers" tables that follow.
Brown Shoe (BWS) ($25.84), down 8.2% year to date. Analysts expect the operator of retail shoe stores to report earnings per share of 31 cents. The stock is above all five moving averages shown in the first table with the 200-day simple moving average at $24.47.
The weekly chart is positive with its five-week modified moving average at $25.03. Weekly and semiannual value levels are $23.83 and $23.76, respectively, with a semiannual pivot at $25.19, and monthly and quarterly risky levels at $26.86 and $32.89, respectively.
Cracker Barrel (CBRL) - Get Report ($99.25), down 10% year to date. Analysts expect the country store retailer and restaurant chain to report EPS of $1.22. The stock set an all-time intraday high at $118.63 on Nov. 25, and has been below its 200-day SMA at $102.47 since Jan. 27, trading as low as $92.84 on May 15.
The weekly chart is positive with its five-week MMA at $97.44. Semiannual and weekly value levels are $98.95 and $96.37, respectively, with semiannual and monthly risky levels at $104.88 and $105.31.
Chico's FAS (CHS) - Get Report ($15.46), down 18% year to date. Analysts expect the retailer of specialty private-label casual clothing to report EPS of 29 cents. The stock traded as high as $19.84 on Jan. 2, and went as low as $15.16 on May 21. It has been below its 200-day SMA at $16.86 since Feb. 27.
The weekly chart shifts to positive given a close this week above its five-week MMA at $15.98, as last week's low stayed above its 200-week SMA at $15.01. An annual value level is $11.10 with a weekly pivot at $15.52 and semiannual and monthly risky levels at $16.24 and $18.24, respectively.
Michael Kors (KORS) ($96.40), up 19% year to date. Analysts expect the retailer of luxury footwear and apparel to report EPS of 68 cents. The stock set an all-time intraday high at $101.04 on Feb. 25, and traded as low as $85.71 on April 7. The stock is above all moving averages in the first table. The company has not been publicly traded long enough to have a 200-week SMA.
The weekly chart is positive with its five-week MMA at $92.72. Weekly and quarterly value levels are $91.02 and $88.32, respectively, with a monthly pivot at $96.54. The stock has not been publicly traded long enough to have semiannual and annual levels.
Toll Brothers (TOL) - Get Report ($35.50), down 4.1% year to date. Analysts expect the luxury homebuilder to report EPS of 25 cents. The stock set a multiyear intraday high at $39.65 on March 4, and traded as low as $33.26 on May 15. It's above all five key moving averages shown in the first table.
The weekly chart shifts to positive, given a close this week above its five-week MMA at $35.16, as such would likely pull the 12x3x3 weekly slow stochastic above the oversold reading of 20.00. Weekly and semiannual value levels are $34.25 and $33.48, respectively, with a semiannual pivot at $35.68 and monthly and quarterly risky levels at $39.73 and $43.43, respectively.
Your investment policy among these stocks depends on whether you are a buyer on weakness or a seller of strength. We advocate using a good-'til-canceled limit order to buy weakness to a value level or to sell strength to a risky level.
Crunching the Numbers With Richard Suttmeier: Moving Averages & Stochastics
This table provides the technical status for the stocks profiled in today's report.
There are five columns with moving average titles: Five-Week Modified Moving Average, 21-Day Simple Moving Average, 50-Day Simple Moving Average, 200-Day Simple Moving Average and the 200-Week Simple Moving Average.
The column labeled 12x3x3 Weekly Slow Stochastics shows the pattern on each weekly chart with readings from Oversold, Rising, Overbought, Declining or Flat.
Interpretations: Stocks below a moving average are listed in red.
Five-Week Modified Moving Average (MMA) is one of two indicators that define whether a weekly chart profile is positive, neutral or negative. The other is the status of the 12x3x3 weekly slow stochastic.
A stock with a positive technical rating is above its five-week MMA with rising or overbought stochastics.
A stock with a negative technical rating is below its five-week MMA with declining or oversold stochastics.
A stock with a neutral technical rating has a profile that is not positive or negative.
The 200-Week Simple Moving Average (SMA) is considered a long-term technical support or resistance and as a "reversion to the mean" over a rolling three-to-five-year horizon. (Even Apple declined to its 200-week SMA in June 2013.)
The 21-Day Simple Moving Average is a short-term technical support or resistance used by many hedge fund traders to adjust positions. A stock above its 21-day SMA will likely move higher over a rolling three-to-five-day horizon and vice versa.
The 50-Day Simple Moving Average is also a technical support or resistance used by many strategists and commentators in financial TV.
The 200-Day Simple Moving Average is another technical support or resistance, and I consider this level as a shorter-term "reversion to the mean" over a rolling six-to-12-month horizon.
Crunching the Numbers With Richard Suttmeier: Earnings & Where to Buy & Where to Sell
This table presents the EPS estimates including date and before or after the close, and where to buy on weakness and where to sell on strength.
EPS Date is the day the company reports their quarterly results.
EPS Estimate is the earnings per share estimate from Wall Street analysts.
Value Levels, Pivots and Risky Levels are calculated based upon the last nine weekly closes (W), nine monthly closes (M), nine quarterly closes (Q), nine semiannual closes (S) and nine annual closes (A). I have one column for pivots, which is a magnet for the period shown. The columns to the left of the pivots are first and second value levels. The columns to the right of the pivots are first and second risky levels.
Investors who wish to buy a stock should use a good-until-canceled (GTC) limit order to buy weakness to a value level. Investors who want to sell a stock should use a GTC limit order to sell strength to a risky level.
At the time of publication, the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff
Richard Suttmeier is the chief market strategist at
ValuEngine.com. He has been a professional in the U.S. Capital Markets since 1972, transferring his engineering skills to the trading and investment world.
Suttmeier has an engineering degree from Georgia Tech and a Master of Science degree from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. He became the first long bond trader for Bache in 1978, and formed the Government Bond Department at LF Rothschild in 1981, helping establish that firm as a primary dealer in 1986. This experience gives him the insights to be an expert on monetary policy, which he features in his newsletters, and market commentary.
Suttmeier's industry licenses include, Series 7 and Registered Principal (Series 24). He has been the Chief Market Strategist for ValuEngine.com since 2008 and often appears on financial TV.
Click here for details on Suttmeier's "Buy and Trade" investment strategy.
Richard Suttmeier can be reached at RSuttmeier@Gmail.com