Earnings Roll, and the Beats Go On

NEW YORK ( TheStreet) -- "And the Beat Goes On" was a huge hit for Sonny & Cher way back in 1967. This has to be the theme song for the Q4 2012 earnings season as "drums keep pounding a rhythm to the brain" as company after company beat earnings expectations.

On Jan. 7 I kicked off my analysis of the Q4 earnings in Overvalued Stocks Raise the Earnings Bar , and the drumbeat began with Monsanto ( MON) ($96.11) reporting before the bell on Jan. 8. The company beat EPS estimates by 25 cents per share by earning 62 cents per share. The stock gapped high and my monthly risky level at $99.53 soon became a pivot. This week Monsanto has been downgraded to hold from buy with the stock at $102.41.

After the close on Jan. 8, Alcoa Inc ( AA) ($9.26) matched expectations earning 6 cents per share and the stock gapped higher to $9.33 the next morning on positive guidance, then dipped to and held its 200-day simple moving average on Jan. 16, now at $8.82. The stock maintained a hold rating and rebounded to $9.20 yesterday.

After the close on Jan. 9, Constellation Brands ( STZ) ($36.75) reported an earnings beat of 8 cents a share earning 63 cents per share. The stock gapped higher that morning, but the stock drifted lower to $34.46 on Jan. 14 before setting a new all time high at $38.99 on Jan. 17. The stock has maintained its buy rating with a weekly pivot at $37.47 and monthly risky level at $41.03.

Before the open on Jan. 11, Wells Fargo ( WFC) ($34.94) beat EPS estimates by 4 cents earning 91 cents per share. The stock has moved sideways since this report between my annual pivot at $34.17 and quarterly risky level at $36.83 while maintaining a buy rating.

On Jan. 14, I continued my analysis in Earnings From These Seven Stocks Should Set the Market's Tone , and the earnings beats continued. Before the open on Jan. 15, Lennar ( LEN) ($40.95) beat EPS estimates by 12 cents earning 56 cents per share. The stock declined to $39.80 that day then popped to another new multi-year high at $42.34 on Jan. 18, as my monthly pivot at $40.58 became a magnet. Lennar still has a buy rating without a risky level at this time.

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