Earnings, It's All About the Bottom Line

NEW YORK ( TheStreet) -- As the third quarter earnings season began I warned it was important for companies to beat estimates on the revenue line. This awareness came to a head mid-day Thursday and continued into the pre-market on Friday. Here, I profile six stocks who report quarterly results after the close Monday and on Tuesday.

The Dow Industrial Average traded as high as 13,588.73 Thursday morning, then Google ( GOOG) inadvertently released its earnings report at 12:30 p.m. with a huge miss in earnings-per-share and on the revenue line.

Then after the close on Thursday Microsoft's ( MSFT) also disappointed. Weaker-than-expected earnings reports continued pre-market on Friday with Dow components General Electric ( GE) and McDonald's ( MCD).

The Dow declined 245 points from the week's high to end the week at 13,343.51, below both its 50-day simple moving average at 13,352.83 and its five-week modified moving average at 13,356.29.

The weekly chart for the Dow shifts to negative with a close this week below the five-week MMA at 13,358.29, only if the 12x3x3 weekly slow stochastic reading declines below 80.00 from the current 83.99.

The downside risk is to the 200-week SMA at 11,008, which held on weakness between August and September 2011. My annual value level is 12,312 with a monthly pivot at 13,506 and weekly, annual and quarterly risky levels at 13,649, 14,032 and 14,192, which are below the October 2007 high at 14,198.10.

Chart Courtesy of Thomson/Reuters

At www.ValuEngine.com we show that 56.8% of all stocks are undervalued with 43.2% overvalued with 12 of 16 sectors overvalued. The five most overvalued are; construction by 16.4%, medical by 13.3%, consumer staples by 12.1%, retail-wholesale by 12.1%, utilities by 11.6% and finance by 11.6%.

If you liked this article you might like

Why Bayer's $66 Billion Takeover of Monsanto Probably Won't Happen Until 2018

DowDupont Closes Higher in First Day of Trading, Company Still Faces Challenges

Apple Is the Tom Brady of Stocks: Cramer's 'Mad Money' Recap (Thursday 8/31/17)

FMC Stock's Impressive Rally Has Another 20% to Gain: Jim Cramer

Jim Cramer on Why FMC Was Upgraded by Bank of America