Investing Ahead of Earnings: Lennar, Nike and Tiffany

NEW YORK (TheStreet) -- Today we preview seven companies reporting earnings Thursday and Friday. We crunch the numbers; you decide when to invest. Look at Page 2 for a handy key to the trading and investment terms I use.

ConAgra Foods (CAG) ($29.56, down 12% year to date): Analysts expect the food company to report earnings of 60 cents a share before the opening bell on Thursday. The stock set an all-time intraday high of $37.28 on Aug. 5, 2013. It traded as high as $34.18 on Jan. 15 before declining to as low as $28.09 on Feb. 27. The weekly chart is negative but oversold. The five-week modified moving average is at $30.06, and the 200-week simple moving average is at $27.51. Monthly and weekly value levels are $28.95 and $26.57, respectively, with annual and semiannual risky levels at $32.21 and $33.81, respectively.

Darden Restaurants (DRI) ($49.70, down 8.6% YTD): Analysts expect the parent of restaurant chains Red Lobster, Olive Garden, LongHorn Steakhouse and The Capital Grill to report earnings of 82 cents a share before the opening bell on Friday. The stock set a multiyear intraday high at $54.89 on Dec. 23, then traded as low as $47.05 on Feb. 5 before rebounding to its 200-day SMA at $50.32. Shares ended Monday's session below that level. The weekly chart is negative with the stock between its 200-week SMA at $48.61 and its five-week MMA at $50.06. Weekly and annual value levels are $48.29 and $44.89, respectively, with a monthly pivot at $50.04 and annual and quarterly risky levels at $52.59 and $56.60, respectively.

Lennar (LEN) ($40.06, up 1.3% YTD): Analysts expect the homebuilder to report earnings of 28 cents a share before the opening bell on Thursday. The stock set a multiyear intraday high at $44.40 on Feb. 27 and then traded as low as $39.79 on Friday. That's lower than its 50-day SMA at $40.26. The weekly chart is negative with the stock's five-week MMA at $40.56. My monthly value level is $39.49 with semiannual risky levels at $41.07 and $43.94, respectively.

Nike (NKE) ($78.32, down 0.4% YTD): Analysts expect this maker of upscale sports-oriented sneakers and Dow component to report earnings of 73 cents a share after the closing bell on Thursday. The stock traded to an all-time intraday high at $80.26 on Dec. 9, then traded as low as $69.85 on Feb. 5, staying above its 200-day SMA, now at $71.17. The stock traded as high as $80.09 on March 7, challenging the prior high. The weekly chart is positive with its five-week MMA at $77.24. My quarterly value level is $58.15 with a weekly pivot at $78.42 and monthly and semiannual risky levels at $83.29 and $89.41, respectively.

Shoe Carnival (SCVL) ($26.08, down 10% YTD): Analysts expect the retailer of footwear for the whole family to report earnings of 4 cents a share after the closing bell on Thursday. The stock set an all-time intraday high at $29.75 on Jan. 7 then traded as low as $23.59 on Jan. 24 before rebounding to its 200-day SMA at $26.14. The weekly chart is positive with its five-week MMA at $26.06. My annual value level is $24.20 with a weekly pivot at $26.61 and monthly and semiannual risky levels at $29.19 and $29.22, respectively.

Tibco Software (TIBX) ($21.23, down 5.6% YTD): Analysts expect the software company to report earnings of 11 cents a share after the closing bell Thursday. The stock set an all-time intraday high of $27.15 on Sept. 20, 2013, then traded as low as $20.39 on Feb. 4, with the stock below all five moving averages shown in today's "Crunching the Numbers" table. (See Page 2.) The weekly chart is neutral with rising stochastics, but with the stock below its five-week MMA at $21.72 and its 200-week SMA at $23.73. Weekly and annual value levels are $19.52 and $15.08, respectively, with annual and monthly risky levels at $24.28 and $25.08, respectively.

Tiffany (TIF) ($92.31, down 0.5% YTD): Analysts expect the luxury jewelry retailer to report earnings of $1.52 a share before the opening bell Friday. The stock traded to an all-time intraday high at $94.88 on March 6. The weekly chart is positive with its five-week MMA at $90.47. Annual and quarterly value levels are $78.01 and $77.26, respectively, with a weekly pivot at $91.46 and semiannual and monthly risky levels at $93.37 and $96.94, respectively.

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 Stochastics shows 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 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 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-'til-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.

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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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