Trading Guidelines for Apple and Facebook Earnings

NEW YORK (TheStreet) -- Apple (AAPL) and Facebook (FB) are the headliners reporting after the bell today in what could be a volatile post-earnings trading session.  

Among the seven stocks profiled today ahead of their companies' earnings reports to be released after the closing bell today, five are up between 6.1% and 20.2% year-to-date, outperforming the S&P 500, which is up 1.7%. The other two are down 5.2% and 9%. The numbers are an indication of the potential post-earnings volatility given that one stock is overbought on its weekly chart and the other six have declining weekly stochastics.

We profile these stocks pre-earnings to help investors capture at least a portion of potential volatility. We provide two Crunching the Numbers' tables. The first table covers the technicals and the second table covers analysts' earnings-per-share estimates and where to buy on weakness and where to sell on strength.

Let's start with individual profiles then get into the tables that follow.

Apple ($531.70, down 5.2% YTD): Analysts expect Apple to report earnings per share of $10.21. The stock traded as low as $511.33 on April 15, holding its 200-day simple moving average at $511.55.

The weekly chart is neutral with its five-week modified moving average at $528.93. An annual value level is $517.05 with a weekly pivot at $530.84 and annual and weekly risky levels at $586.06 and $592.82. Given extreme volatility our quarterly value level is $452.39.

Citrix Systems (CTXS) ($57.56, down 9% YTD): Analysts expect the application software provider to report earnings per share of 38 cents. The stock has been below its 200-day SMA at $62.66 since Oct. 8, and traded as low as $51.18 on Jan.30. Even the 2014 intraday high at $62.92 on March 21 was below the 200-day SMA. This average is now at $62.66.

The weekly chart is negative with its five-week MMA at $57.57. Our monthly value level is $50.14 with a quarterly pivot at $56.05and annual risky levels at $68.20 and $71.60.

Facebook ($63.03, up 15.3% YTD): Analysts expect the social-media company to report earnings per share of 18 cents. The company set an all-time intraday high at $72.59 on March 11, and traded as low as $55.44 on April 7.

The weekly chart is neutral with its five-week MMA at $61.65. A weekly value level is $57.27 with a monthly risky level at $73.18.

F5 Networks (FFIV) ($109.22, up 20.2% YTD): Analysts expect the provider of networking software to report earnings per share of 95 cents. The stock set a 52-week intraday high at $116.70 on March 7, and traded as low as $102.51 on April 11.

The weekly chart shifts to negative on a weekly close below its five-week MMA at $107.02. Weekly and monthly value levels are $106.79 and $102.54 with a semiannual risky level at $138.66.

Qualcomm (QCOM) ($80.61, up 8.6% YTD): Analysts expect the maker of chips for cell phones to report earnings per share of $1.09 . The stock set a multiyear intraday high at $81.66 on Monday.

The weekly chart is positive but overbought with its five-week MMA at $78.44. Semiannual value levels are $69.51 and $64.35 with a weekly pivot at $80.72 and monthly risky level at $81.69.

Texas Instruments (TXN) ($46.59, up 6.1% YTD): Analysts expect the semiconductor giant to report earnings per share of 41 cents. The stock popped as high as $49.70 on April 1, and traded as low as $44.54 on April 16.

The weekly chart is neutral with its five-week MMA at $45.61. Semiannual and quarterly value levels are $41.39 and $41.05 with monthly and weekly risky levels at $47.30 and $47.38.

Zynga (ZNGA) ($4.56, up 20% YTD): Analysts expect the game app developer to report an earnings loss of 5 cents a share. The stock declined from a 2014 high at $5.87 on March 12, and went as low as $3.79 on April 15, holding the 200-day SMA at $3.91.

The weekly chart is neutral with its five-week MMA at $4.51. A weekly pivot is $4.40 with a monthly risky level at $5.08.

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 are listed in red.

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.

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. 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

More from Opinion

AAP Exclusive: Cramer Says The President is No Longer on the Side of the Bulls

AAP Exclusive: Cramer Says The President is No Longer on the Side of the Bulls

Why It Makes Perfect Sense for Netflix and Amazon to Buy Up Movie Theaters

Why It Makes Perfect Sense for Netflix and Amazon to Buy Up Movie Theaters

2 More Reasons to Sell All Your Stocks and Run Away

2 More Reasons to Sell All Your Stocks and Run Away

Sean Hannity's Link to Trump Lawyer Raises Questions: Doug Kass Insider

Sean Hannity's Link to Trump Lawyer Raises Questions: Doug Kass Insider

Netflix Blowout Earnings Remind Investors of One Thing: This Company Is a Beast

Netflix Blowout Earnings Remind Investors of One Thing: This Company Is a Beast