NEW YORK (TheStreet) - Last week's volatile ride for the major equity averages set a shaky stage as first-quarter earnings season begins on Tuesday.
The Dow Industrial Average and S&P 500 set all-time intraday highs at the open on Friday at 16631.63 and 1897.28, and then closed below Thursday's lows, which are key reversal days. The S&P tested its monthly risky level at 1895.6 and then pulled back. The Nasdaq and Russell 2000 now have negative weekly charts.
Today's Crunching the Numbers tables assess the four stocks profiled below. After the profiles, the first table provides five important moving averages and stochastic readings. The second table provides earnings estimates, value levels at which to buy on weakness and risky levels at which to sell on strength.
Alcoa (AA) ($12.63, up 18.8% year to date): Analysts expect the aluminum producer to report earnings per share of 5 cents after the closing bell on Tuesday. The former Dow component traded at a multiyear intraday high at $13.18 last Tuesday, which is above this week's weekly risky level at $12.94 and the monthly risky level at $13.01. That implies that the stock won't set a new high in reaction to earnings.
The weekly chart is positive but overbought with its five-week modified moving average at $11.93. Semiannual and quarterly value levels at $12.33 and $9.34.
Bed Bath & Beyond (BBBY) ($69.22, down 13.8% YTD): Analysts expect the retailer of household items to report earnings of $1.60 per share after the closing bell on Wednesday. The stock plunged below its 200-day simple moving average at $73.19 on Jan. 9, following a disappointing fourth-quarter earnings report, and traded as low as $62.12 on Feb. 3.
The weekly chart is positive with its five-week MMA at $68.36. The stock stayed below its semiannual risky level at $82.61 as the year began and traded below its annual value level at $64.99 at the 2014 low, which was a buying opportunity. The stock's monthly pivot at $69.31 should be the dividing point between a positive and negative reaction to earnings.
Constellation Brands (STZ) ($84.33, up 19.8% YTD): Analysts expect the beverage maker to report earnings of 76 cents a share before the opening bell on Wednesday. The stock traded at an all-time parabolic intraday high at $85.91 on Tuesday, which was a test of this quarter's pivot at $85.81, where investors could have reduced positions pre-earnings.
The weekly chart is positive but overbought in a parabolic bubble pattern with its five-week MMA at $81.51. If the bubble pops, the risk is to semiannual value levels at $58.42 and $49.57. Weekly and monthly risky levels are $87.41 and $91.33.
WD 40 (WDFC) ($75.66, up 1.3% YTD): Analysts expect the lubricant maker to report earnings of 67 cents a share after the closing bell on Tuesday. The stock set an all-time intraday high at $79.31 on Dec. 24 and challenged that with a high at $78.77 last Wednesday. The in-between low was $66.75 on Feb. 3.
The weekly chart is positive with its five-week MMA at $74.58. The recent high was a test of our quarterly risky level at $77.66 with a weekly risky level at $79.88 and this range suggests that the stock will not see a new high following earnings. Semiannual and annual value levels lag at $68.50 and $65.
Crunching the Numbers with Richard Suttmeier: Moving Averages & Stochastics
This table provides the technical status for the stocks profiled in today's report.
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 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 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)
Crunching the Numbers with Richard Suttmeier: Earnings & Where to Buy & Where to Sell
This table presents the EPS estimates including date and before or after the close, and where to buy on weakness and where to sell on strength.
EPS Date is the day the company reports their quarterly results.
EPS Estimate is the earnings per share estimate from Wall Street analysts.
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.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff