Apple, DuPont and Ford Top Earnings Profiles

NEW YORK (TheStreet) -- Last week was rough for stock market traders and investors as the Dow Industrial Average led the five major averages lower. Dow Industrials closed at 15,879 on Friday, 709 points below the all-time intraday high at 16,588.25 set on the last day of 2013. Dow transports set an all-time intraday high at 7591.43 last Thursday then closed Friday at 7259 down 332 points from the high in just one day.

If this downside volatility continues my pre-earnings buy-and-trade profiles become even more important as guidance for traders and investors. This week there are many companies reporting results and I begin my analysis with bellwether Apple (AAPL) which reports after the close today. Then tomorrow premarket we hear from Dow component DuPont (DD) and automobile manufacturer Ford Motor (F).

Stock market weakness plus a lower 30-Year Treasury bond yield reduced the percentage of stocks overvalued to a still extremely elevated 81.3% down from 85.3% from Thursday. The percentage of stocks overvalued by 20% or more declined to 44.5% from 52.7%.

The technicals for the five major averages remain overbought on their weekly charts but only the Nasdaq ended last week above its five-week modified moving average at 4105. Dow Industrials, the S&P 500, Dow transports and Russell 2000 have thus been downgraded to neutral. Weekly closes below all five-week MMAs with all 12x3x3 weekly slow stochastic readings declining below 80.00 signals the end to the bull market for stocks, and the equities bubble will finally pop.

Apple ($546.07): Analysts expect the company to earn $14.04 a share afterhours today. Apple represents the computer and technology sector which is 35.4% overvalued with an overweight rating as 51.6% of the 1125 stocks in the sector have buy or strong buy ratings according to www.ValuEngine.com. Apple ended last week fractionally below its 50-day simple moving average at $546.56 with the 200-day SMA at $482.16. The weekly chart is neutral with the stock above its five-week MMA at $540.83 with declining stochastics and its 200-week SMA at $431.96. Apple has a buy rating is 9.5% overvalued with a gain of 21.2% over the last 12 months. Weekly and annual value levels are $539.55 and $517.05 with a monthly pivot at $549.13 and an annual risky level at $586.06. To view must-see charts read my post from Friday, Apple and IBM Have Must-See Charts.

Caterpillar (CAT) ($86.17): Analysts expected the company to earn $1.28 a share premarket today. The heavy equipment company reported earnings of $1.54 share. Caterpillar represents the industrial products sector which is 25.7% overvalued with an underweight rating as 30.5% of the 338 stocks in the sector have sell or strong sell ratings. The stock traded to a 2014 high at $93.20 on Jan. 15 then slumped to $85.88 on Friday between its 200-day and 50-day SMAs at $85.39 and $87.23. The weekly chart is negative with the stock below its five-week MMA and 200-week SMA at $88.15 and $88.60 with declining stochastics. Caterpillar has a hold rating is 15.6% overvalued with a loss of 10.8% over the last 12 months. My monthly value level is $85.71 with a quarterly pivot at $87.52 and weekly and annual risky levels at $92.17, $95.79 and $97.90.

DuPont ($59.97): Analysts expect the company to earn 55 cents a share premarket Tuesday. DuPont represents the basic materials sector which is 11.7% overvalued with an underweight rating as 64.1% of the 387 stocks in the sector have sell or strong sell ratings. The stock traded to a 2014 high at $65.00 on Tuesday then declined to $59.95 on Friday between its 200-day and 50-day SMAs at $57.97 and $62.22. The weekly chart is negative with the stock below its five-week MMA at $62.20 with declining stochastics and its 200-week SMA at $49.71. DuPont has a hold rating is 16.1% overvalued with a gain of 24.8% over the last 12 months. My annual value level is $51.35 with quarterly and monthly risky levels at $62.86 and $64.09.

Ford ($15.83): Analysts expect the company to earn 28 cents a share premarket Tuesday. Ford represents the auto-tires-trucks sector which is 27.6% overvalued with an underweight rating as 38.3% of the 94 stocks in the sector have sell or strong sell ratings. The stock traded to a 2014 high at $16.78 on Jan. 17 then declined to $15.78 on Friday below its 200-day and 50-day SMAs at $16.13 and $16.31. The weekly chart is neutral with the stock below its five-week MMA at $16.15 with rising stochastics and its 200-week SMA at $13.23. Ford has a hold rating is 23.1% overvalued with a gain of 14.1% over the last 12 months. Weekly and annual value levels are $14.87 and $14.04 with quarterly and semiannual pivots at $16.18 and $16.73 and monthly and semiannual risky levels at $18.77 and $19.45.

Pfizer (PFE) ($30.09): Analysts expect the company to earn 52 cents a share premarket Tuesday. Pfizer represents the medical sector which is 37.8% overvalued with an underweight rating as 33.3% of the 762 stocks in the sector have sell or strong sell ratings. The stock traded to a 2014 high at $31.42 on Jan. 16 then declined to $30.06 on Friday between its 200-day and 50-day SMAs at $29.61 and $31.09. The weekly chart is negative with the stock below its five-week MMA at $30.65 with declining stochastics and its 200-week SMA at $22.53. Pfizer has a hold rating is 29.2% overvalued with a gain of 12.1% over the last 12 months. My annual value level is $23.35 with monthly and semiannual pivots at $29.84, $29.20 and $28.78 and a quarterly risky level at $32.23.

Swift Transport (SWFT) ($20.76): Analysts expect the company to earn 35 cents a share afterhours today. Swift represents the transportation sector which is 33.3% overvalued with an underweight rating as 71.2% of the 170 stocks in the sector have sell or strong sell ratings. The trucker traded to a 2014 high at $22.50 on Jan. 21 then declined to $20.74 on Friday between its 200-day and 50-day SMAs at $18.85 and $22.12. The weekly chart is negative with the stock below its five-week MMA at $21.46 with declining stochastics. Swift has a hold rating is 22.6% overvalued with a gain of 58% over the last 12 months. My annual value level is $15.85 with weekly and quarterly pivots at $20.14 and $21.55 and a monthly risky level at $25.70.

US Steel (X) ($25.28): Analysts expect the company to report a loss of 26 cents a share afterhours today. US Steel is the second stock representing the basic materials sector which is 11.7% overvalued with an underweight rating as 64.1% of the 387 stocks in the sector have sell or strong sell ratings. The stock traded to a 2014 high at $31.15 on Jan. 2 then plunged to $25.18 on Friday between its 200-day and 50-day SMAs at $21.48 and $27.74. The weekly chart is negative with the stock below its five-week MMA and 200-week SMAs at $27.21 and $32.37 with declining stochastics. US Steel has a hold rating is 6% undervalued with a gain of 4.4% over the last 12 months. My quarterly value level is $20.10 with monthly and weekly pivots at $27.04 and $28.33 and a semiannual risky level at $34.50.

Zions Bancorp (ZION)($30.23): Analysts expect the company to report a loss of 45 cents a share today. Zions represents the finance sector which is 21.3% overvalued with an equal-weight rating as 83% of the 2956 stocks in the sector have hold ratings. The stock spiked to a 2014 high at $32.29 on Wednesday then slumped to $30.22 on Friday above its 200-day and 50-day SMAs at $28.36 and $29.49. The weekly chart is positive but overbought with stock above its five-week MMA and 200-week SMAs at $29.75 and $22.62 with overbought stochastics. Zions has a hold rating is 26.4% overvalued with a gain of 33.1% over the last 12 months. A weekly pivot is $30.17 semiannual, monthly and quarterly risky levels at $32.58, $35.11, $33.08 and $33.54.

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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