AOL and Time Warner Beat, First Solar Goes to the Woodshed

NEW YORK ( TheStreet) -- Stocks continued to slide Wednesday as momentum on the daily charts for the major equity averages begin to roll over. Among the seven stocks I profiled pre-earnings on Aug. 5 in AOL, Time Warner, Disney and First Solar Earnings Preview, four beat EPS estimates, one matched and both energy-related companies missed.

The Dow Industrial Average stayed above its weekly value level at 15,374 as did the S&P 500 vs. its weekly level at 1676.8. The Nasdaq closed below its monthly pivot at 3663. The Dow transportation average closed below its weekly value level at 6475, while the Russell 2000 stayed below its weekly level at 1053.08.

Fundamentally the ValuEngine valuation warning continues with 75.5% of all stocks overvalued with 42.2% overvalued by 20% or more. 15 of 16 sectors are overvalued, 14 by double-digit percentages including eight overvalued by more than 20%.

Scorecard from stocks that reported earnings results Tuesday afterhours and Wednesday premarket:

AOL ( AOL) ($36.69) beat EPS estimates by 6 cents earning 39 cents a share. The stock closed at $36.18 on Tuesday and opened higher on Wednesday trading to a day's high at $38.40 then dipped to $36.63 staying above its 50-day and 200-day SMAs at $36.30 and $35.56. My monthly value level is $33.39 with quarterly and weekly pivots at $35.79 and $37.48.

Disney ( DIS) ($65.91) matched estimates earning $1.03 a share. The stock closed at $67.05 on Tuesday and traded down to $64.12 on Wednesday vs. its 50-day SMA at $64.45. My quarterly value level is $59.87 with weekly and semiannual pivots at $64.85 and $66.09 with a monthly risky level at $68.88.

Marathon Oil ( MRO) ($35.13) missed estimates by 4 cents earning 67 cents a share. The stock closed at $36.88 on Tuesday and gapped below its 50-day SMA at $35.66 on Wednesday staying above its 200-day SMA at $33.31. Marathon is trading below my monthly pivot at $37.12.

Nuance Communications ( NUAN) ($19.10) beat estimates by 2 cents earning 22 cents a share. The stock closed at $19.33 on Tuesday and gapped below its 50-day SMA at $18.86 on Wednesday trading down to $17.90. My monthly and weekly pivots are $17.52 and at $18.71 with my annual risky level at $22.02.

Time Warner ( TWX) ($63.84) beat estimates by 8 cents earning 83 cents a share. The stock closed at $64.09 on Tuesday and traded up to a new multi-year high at $66.01 then drifted into the close on Wednesday. My semiannual value level is $63.73 with a monthly risky level at $65.95, which was tested at the new high.

Wellcare Health ( WCG) ($65.28) beat estimates by 11 cents earning $1.35 a share. The stock closed at $60.57 on Tuesday and gapped higher on Wednesday trading up to a new 2013 high at $68.17. My quarterly value level is $57.40 with weekly and monthly pivots at $62.94 and $63.42 and semiannual risky levels at $69.44 and $72.05.

Stocks taken to the woodshed:

First Solar ( FSLR) ($40.47) missed estimates by 11 cents earning 39 cents a share. The stock closed at $46.75 on Tuesday and gapped lower on Wednesday to a day's low at $40.00 on its trip to the investor woodshed. My semiannual value level is $39.45 with a monthly risky level at $52.13. First Solar remains above its 200-day simple moving average at $36.20. The stock kept a hold rating this morning.

SunPower ( SPWR) ($21.58) reported quarterly results July 31 and beat EPS estimates by 20 cents earning 31 cents a share. The stock was trading at a multi-year high at $28.15 pre-earnings so it appears that good news was priced into this lofty level. The stock was sliding and on Wednesday morning gapped lower trading below its 50-day SMA at $22.31. The high was a test of my monthly risky level at $27.77 before the stock was sent to the woodshed. The stock has been upgraded to buy from hold according to ValuEngine on this weakness.

At the time of publication the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Richard Suttmeier has an engineering degree from Georgia Tech and a master of science from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. In 1981 he formed the Government Bond Department at LF Rothschild and helped establish that firm as a primary dealer in 1986. Richard began writing market research in 1984 and held positions as market strategist at firms such as Smith Barney, William R Hough, Joseph Stevens, and Rightside Advisors. He joined www.ValuEngine.com in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs a "buy and trade" investment strategy and can be reached at RSuttmeier@Gmail.com.

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