Microsoft, Procter & Gamble and Starbucks Earnings Preview

NEW YORK (TheStreet) -- Earnings continue with eight companies reporting their quarterly results after hours today or premarket on Friday. My buy-and-trade pre-earnings profiles represent stocks in five sectors in a market that remains extremely overvalued with 85.3% of all stocks overvalued 52.7% by 20% or more.

There is an interesting dynamic at play among these eight stocks as five will end the week with negative weekly chart profiles unless they rally enough to have weekly closes above their five-week modified moving averages. To review, a negative weekly chart is defined by a weekly close below its five-week MMA with 12x3x3 weekly slow stochastic readings declining below 80.00 on a scale of 00.00 to 100.00.

Three companies are in the computer and technology sector which is 35.7% overvalued with an overweight rating as 52.1% of the 1126 stocks in the sector have buy or strong buy ratings. This includes buy-rated Dow component Microsoft (MSFT) which stayed above its 200-day simple moving average on weakness to $34.31 on Jan. 14 with a day's low at $34.63. The stock must overcome a negative weekly chart profile.

Procter & Gamble (PG) is from the consumer staples sector which is 22% overvalued with an overweight rating as 60.3% of all stocks in the sector have buy or strong buy ratings. Dow component Procter & Gamble closed below its 200-day simple moving average  for the first time since Oct. 9 and also must overcome a negative weekly chart profile.

Two companies are in the finance sector which is 22% overvalued with an equal-weight rating as 83.8% of the 2961 stocks in the sector have hold ratings. One of the two is another regional bank.

One is in the industrial products sector which is 28% overvalued with an equal-weight rating as 50.75 of the 339 stocks in the sector have hold ratings. Beware that 35.4% have sell or strong sell ratings.

One company is in the retail-wholesale sector which is 22.5% overvalued with an overweight rating as 82.8% of the 343 stocks in the sector have buy or strong buy ratings. We will see what's brewing at buy-rated Starbucks (SBUX) which fell below its 50-day SMA on Dec. 10 with its 200-day SMA at $71.79. The stock must also overcome a negative weekly chart after setting an all-time intraday high at $82.50 on Nov. 6.

City National (CYN) ($81.07): Analysts expect the company to earn $1.06 cents a share afterhours today. The regional bank set an all-time intraday high at $81.34 on Jan. 22 and is above its 50-day and 200-day SMAs at $77.13 and $68.02. The weekly chart is positive but overbought with its five-week MMA at $77.86 and its 200-week SMA at $55.45. The bank has a hold rating is 39.4% overvalued with a gain of 53.1% over the last 12 months. Semiannual value levels are $73.68 and $72.38 with a quarterly pivot at $77.92 and monthly risky level at $83.81.

Discover Financial (DFS) ($53.66) - Analysts expect the company to earn $1.18 a share afterhours today. The credit card financial set an all-time intraday high at $56.20 on Dec. 31 then closed above its 50-day SMA at $53.40 on Jan. 22 with its 200-day SMA at $49.96. The weekly chart shifts to negative given a close this week below its five-week MMA at $53.75 with its 200-week SMA at $31.82. The stock has a hold rating is 18.2% overvalued with a gain of 38% over the last 12 months. My semiannual value level is $50.77 with semiannual and monthly risky levels at $55.50 and $58.36.

Juniper Networks (JNPR) ($26.18): Analysts expect the company to earn 27 cents a share afterhours today. The provider of network equipment traded to a multiyear intraday high at $26.52 on Tuesdsay well above its 50-day and 200-day SMAs at $21.74 and $19.94. The weekly chart is positive but overbought with its five-week MMA at $23.33 and its 200-week SMA at $24.42. Juniper has a hold rating is 11.4% overvalued with a gain of 21.8% over the last 12 months. Monthly and annual value levels are $23.79 and $21.30 with a semiannual pivot at $24.44 and an annual pivot at $26.25. .

KLA-Tencor (KLAC) ($63.66) - Analysts expect the company to earn 79 cents a share afterhours today. The semiconductor and microelectronics company is above its 50-day SMA at $63.32 with its 200-day SMA at $59.27. The weekly chart stays negative given a weekly close below its five-week MMA at $63.23 with its 200-week SMA at $46.75. The stock has a buy rating is 40% overvalued with a gain of 22.9% over the last 12 months. My semiannual value level is $60.93 with a quarterly pivot at $62.28 and semiannual and monthly risky levels at $65.55 and $66.87.

Microsoft ($35.93): Analysts expect the company to earn 67 cents a share afterhours today. The software giant and Dow component set a multiyear intraday high at $38.98 on Dec. 4 then traded as low as $34.63 on Jan. 14 and is below its 50-day SMA at $37.14 and above its 200-day SMAs at $34.31. The weekly chart is negative with its five-week MMA at $36.51 and its 200-week SMA at $28.97. Microsoft has a buy rating is 26.8% overvalued with a gain of 32.3% over the last 12 months. Annual and semiannual value levels are $30.95 and $29.42 with annual and semiannual pivots at $34.02 and $34.59 and monthly and quarterly risky levels at $37.19 and $38.61.

Procter & Gamble ($79.23): Analysts expect the company to earn $1.20 a share premarket on Jan. 24. The seller of consumer packaged goods and Dow component set an all-time intraday high at $85.82 on Nov. 25 and has been below its 50-day SMA at $82.42 since Dec. 19 and closed yesterday below its 200-day SMA at $79.93 for the first time since Oct. 9. The weekly chart is negative with its five-week MMA at $80.88 with its 200-week SMA at $68.26. P&G has a buy rating is 15.4% overvalued with a gain of 13.3% over the last 12 months. Annual and semiannual value levels are $78.14 and $77.93 with an annual pivot at $80.32 and monthly and semiannual risky levels at $82.19 and $82.85.

Starbucks ($73.60): Analysts expect the company to earn 69 cents a share afterhours today. The brewed coffee chain set an all-time intraday high at $82.50 on Nov. 6 and has been below its 50-day SMA at $78.47 since Dec. 10 and is above its 200-day SMA at $71.79. The weekly chart is negative with its five-week MMA at $7678 and its 200-week SMA at $47.72. The stock has a buy rating is 18.2% overvalued with a gain of 33.8% over the last 12 months. My annual value level is $53.76 with semiannual and quarterly risky levels at $78.52 and $81.64 and $80.60.

Stanley Black & Decker  (SWK) ($80.93): Analysts expect the company to earn $1.30 a share premarket on Jan. 24. The provider of tools and related accessories plunged from an all-time intraday high at $92.76 on Oct. 1 down to $74.13 on Oct. 17 and has been trading back and forth around its 200-day SMA at $82 since Nov. 7 with the 50-day SMA at $80.91. The weekly chart is neutral with its five-week MMA at $81.20 and its 200-week SMA at $70.47. The stock has a hold rating is 19.2% overvalued with a gain of 3.9% over the last 12 months. My annual value level is $75.12 with quarterly, monthly and semiannual risky levels are $88.35, $89.37 and $89.39.

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

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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

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