Retail Earnings Recap: Losers Outnumber Winners 9 to 2

NEW YORK (TheStreet) -- Post-earnings volatility from 11 retailers shows how difficult it is to pick stocks so far in 2014.

Only two are year-to-day winners: Williams-Sonoma (WSM) up 10.7% and Foot Locker (FL) up 9.8%. Five of the nine losers are down between 10.1% and 32.3%, proving my point that it's tough to pick retail winners when the S&P 500 is down 0.1% for the year to date.

Stocks that miss analysts' earnings estimates or offer cautious guidance get sent to the earnings woodshed, while those that beat estimates take off in moonshots.

Retailers have suffered from a shorter holiday season and a compressed spring season due to the numerous winter storms. Consumers have also been hurt by higher costs of heating their homes, and last Friday we learned 6.9 million workers were cut to part time from full time due to the weather.

Here's the Retail Earnings Recap, then below see my "Crunching the Numbers" table.

American Eagle Outfitters (AEO) ($12.77, down 11.3% YTD): Reported earnings on March 11 and beat analysts' earnings per share estimates by 1 cent earning 27 cent a share. The stock traded as low as $12.56 on March 12 as full-year earnings were disappointing. The weekly chart shifts to neutral with a close Friday below its five-week modified moving average at $13.95. My monthly value level is $12.15 with semiannual and quarterly risky levels at $14.51, $17.90 and $19.88.

Aeropostale (ARO) ($6.15, down 32.3% YTD): Reported earnings after the closing bell yesterday and missed analysts' EPS estimates by 5 cents reporting a loss of 35 cents a share. The stock opened at $6.15 Friday, setting a new multiyear low. The weekly chart remains neutral with the stock below its five-week MMA at $7.35. My monthly value level is $4.66 with a quarterly risky level at $11.63.

Dollar General (DG) ($57.44, down 4.8% YTD): Reported earnings before the opening bell Thursday and matched analysts' EPS estimates earning $1.01 a share. The stock opened below its 50-day simple moving average at $58.60 on Thursday but stayed above its 200-day SMA at $56.63. The weekly chart shifts to neutral with a close Friday below its five-week MMA at $58.48. My annual value level is $45.67 with semiannual, quarterly and monthly risky levels at $59.17, $64.27 and $64.29.

Dick's Sporting Goods (DKS) ($57.11, down 1.7% YTD): Reported earnings on March 11 and beat analysts' EPS estimates by 1 cent earning $1.11 a share. The stock rebounded to as high as $57.85 on March 13, shy of its all-time intraday high at $58.87 set on Jan. 8. The weekly chart stays positive with its five-week MMA at $54.04. My monthly value level is $56.36 with semiannual and quarterly risky levels at $63.46 and $63.74.

Express (EXPR) ($15.82, down 15.3% YTD): Reported earnings on March 12 and missed analysts' EPS estimates by 2 cents earning 57 cents a share. The stock traded to a new 52-week intraday low at $15.51 in reaction to this miss. The weekly chart shifts to neutral with a close Friday below its five-week MMA at $17.78. My quarterly and monthly risky levels are $18.45 and $20.70.

Foot Locker ($45.38, up 9.5% YTD): Reported earnings on March 7 and beat analysts' EPS estimates by 7 cents earning 82 cents a share. The stock set a new all-time intraday high at $46.80 on March 7. The weekly chart is positive with its five-week MMA at $41.91. My semiannual and monthly value levels are $40.70 and $40.27 with quarterly and semiannual risky levels at $46.26 and $46.78.

Childrens Place (PLCE) ($51.24, down 10.1% YTD): Reported earnings on March 6 and beat analysts' EPS estimates by 2 cents earning 96 cents a share. The stock set a new 2014 intraday low at $47.57 on Feb. 6 on cautious guidance. The weekly chart shifts to neutral with a close Friday below its five-week MMA at $53.18. My annual value level is $40.61 with an annual pivot at $51.32 and quarterly and monthly risky levels at $52.92 and $54.68.

Staples (SPLS) ($11.21, down 29.5% YTD): Reported earnings on March 6 and missed analysts' EPS estimates by 6 cents earning 33 cents a share. The stock gapped lower, setting a new 52-week low at $11.14 on March 13. The weekly chart remains negative but oversold with its five-week MMA at $12.88. My semiannual value level is $7.32 with semiannual, quarterly and annual risky levels at $13.67, $14.53 and $15.54.

ULTA Salon (ULTA) ($95.89, down 0.7% YTD): Reported earnings after the closing bell on March 13 and beat analysts' EPS estimates by 2 cents, earning $1.09 cents a share. The stock popped at Friday's open at $95.89, still well below its 200-day SMA at $102.90. The weekly chart shifts to positive given a close Friday above its five-week MMA at $89.45. My monthly and semiannual risky levels are $108.10 and $120.89.

Urban Outfitters (URBN) ($34.92, down 5.9% YTD): Reported earnings on March 10 and beat analysts' EPS estimates by 4 cents earning 59 cents a share. The stock traded as low as $34.74 after the stock broke below its 50-day SMA at $36.56. The weekly chart shifts to neutral on a close Friday below its five-week MMA at $36.44. My semiannual value level is $33.29 with annual risky levels at $36.29 and $36.78 with quarterly and semiannual risky levels at $44.34 and $46.93.

Williams-Sonoma ($64.53, up 10.7% YTD): Reported earnings on March 12 and beat analysts' EPS estimates by 3 cents earning $1.38 cents a share. The stock set a new all-time intraday high at $59.99 on March 12. The weekly chart remains positive with its five-week MMA at $58.38. Quarterly and monthly value levels are $59.35 and $57.96 with semiannual risky levels at $65.15 and $65.73.

Crunching the Numbers with Richard Suttmeier

There are five columns with moving average titles: Five-Week Modified Moving Average, 21-Day Simple Moving Average, 50-Day Simple Moving Average, 200-Day Simple Moving Average and the 200-Week Simple Moving Average.

The column labeled 12x3x3 Weekly Slow Stochasticsshows the pattern on each weekly chart with readings from Oversold, Rising, Overbought, Declining or Flat.

Interpretations: (stocks below a moving average listed in Red are below that moving average)

Five-Week Modified Moving Average (MMA) is one of two indicators that define whether or not a weekly chart profile is positive, neutral or negative. The other is the status of the 12x3x3 weekly slow stochastic.

A stock with a positive technical rating is above its five-week MMA with rising or overbought stochastics.

A stock with a negative technical rating is below its five-week MMA with declining or oversold stochastics.

A stock with a neutral technical rating has a profile that is not positive or negative.

The 200-Week Simple Moving Average (SMA) is considered a long-term technical support or resistance and as a "reversion to the mean" over a rolling three to five year horizon (even Apple (AAPL) declined to its 200-week SMA in June 2013).

The 21-Day Simple Moving Average is a short-term technical support or resistance used by many hedge fund traders to adjust positions. A stock above its 21-day SMA will likely move higher over a rolling three to five day horizon and vice versa.

The 50-Day Simple Moving Average is also a technical support or resistance used by many strategists and commentators in financial TV.

The 200-Day Simple Moving Average is another technical support or resistance and I consider this level as a shorter-term "reversion to the mean" over a rolling six to 12 month horizon. (even Apple tested or crossed its 200-day SMA in nine of the last 10 years)

Value Levels, Pivots and Risky Levels are calculated based upon the last nine weekly closes (W), nine monthly closes (M), nine quarterly closes (Q), nine semiannual closes (S) and nine annual closes (A). I have one column for pivots, which is a magnet for the period shown. The columns to the left of the pivots are first and second value levels. The columns to the right of the pivots are first and second risky levels.

Investors who wish to buy a stock should use a good-until-canceled GTC limit order to buy weakness to a value level. Investors who want to sell a stock should use a GTC limit order to sell strength to a risky level.

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

Follow @Suttmeier

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.

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