NEW YORK (TheStreet) -- Dow Jones Industrial Average components Caterpillar (CAT), 3M Company (MMM) and Verizon (VZ) will lead more than a dozen companies reporting quarterly earnings before the opening bell on Thursday.
Rather than profile each stock individually, I will interpret the "Crunching the Numbers" tables (see pages 2 and 3) for you.
The biggest year-to-date gainer is Southwest Airlines (LUV) ($23.93), up 27%. The airline seems to be flying at an altitude that should be difficult to sustain. It set an all-time intraday high of $24.45 on April 2. The weekly chart shows declining stochastics with the airline in a parabolic rise of a rocket, not an airplane taking off. Southwest began this rise after moving above its 200-week simple moving average at the beginning of January 2013. A quarterly value level is $21.81, with monthly and weekly risky levels at $24.53 and $24.84, respectively.
The second biggest year-to-date gainer is Under Armour (UA) ($53.87), up 23.4%. This stock is down from an all-time intraday high at $62.39 set on March 19. As a result, the stock will have a negative weekly chart given a close this week below its five-week modified moving average at $53.84. Because we do not show a value level, investors should consider selling strength back to the high as a quarterly risky level is at $62.84.
The biggest year-to-date loser is General Motors (GM) ($34.23), down 16.2%. Key for this stock is how management addresses the recall scandal and whether investors believe the issue is priced into the stock's weakness. The stock traded as low as $31.70 on April 11, and this week's value level at $32.74 should prevent a lower low. The weekly chart will shift to positive given a close this week above its five-week MMA at $34.66. Semiannual and quarterly risky levels are $36.09 and $36.15, respectively.
The Dow Transportation Average set a new all-time intraday high at 7764.90 on Tuesday. In addition to Southwest Airlines, there are two other components in this average in today's tables.
Trucking logistics company and Dow transports component Landstar (LSTR) ($61.93) is up 7.8% year to date. It too set an all-time intraday high, reaching $62.22 on Tuesday. The stock has a positive weekly chart with its five-week MMA at $59.85. We do not show a risky level, so the company needs to beat analysts' earnings per share estimate of 59 cents to sustain this momentum. We show a semiannual pivot at $60.10, which has an 85% chance of being tested by the end of June.
Package delivery giant and Dow transports component United Parcel Services (UPS) ($99.00) has been a laggard. It is down 5.8% this year, as the stock set its all-time intraday high at $105.37 on Dec. 31. The stock has stayed above its 200-day SMA at $94.95 and is above all five moving averages in today's first table. The weekly chart is positive with its five-week MMA at $97.68. A quarterly value level is $94.31 with a weekly pivot at $98.30 and semiannual risky levels at $100.46 and $103.68.
Summarizing the first "Crunching the Numbers" table we see one stock overbought, and that's Caterpillar ($103.69), up 14% year to date. Six stocks have rising stochastics, and seven show declining stochastics. Aetna (AET) ($68.71) and GM are the only stocks below their five-week modified moving averages.
Summarizing the second "Crunching the Numbers" table, we see Landstar as the only stock that does not have a risky level and Under Armour as the only stock that does not have a value level.
Your investment strategy for these stocks depends on whether you are a buyer on weakness or a seller of strength. We advocate using a good 'til cancelled limit order to buy weakness to a value level or to sell strength to a risky level.
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 200-Week Simple Moving Average.
The column labeled 12x3x3 Weekly Slow Stochastics shows the pattern on each weekly chart with readings of 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 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 level 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 level 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 level. I consider it to be 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 its 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 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