How to Bet on Earnings From Amazon, Ford, Microsoft, More

NEW YORK (TheStreet) -- Dow Jones Industrial Average components Microsoft (MSFT) and Visa (V) will lead more than a dozen companies reporting quarterly earnings after the closing bell today or before the opening bell on Friday.

Rather than profile each stock individually, I crunch the numbers in the following tables for you.

The biggest year-to-date gainer is Newmont Mining (NEM) ($25.92), up 12.5%. This is quite a surprise for investors, as the gold miner is down 25% over the last 12 months. The stock tested its 200-day simple moving average at $26.20 on Tuesday. Newmont has been below its 200-day SMA since early November 2012. Gold may have a negative weekly chart but Newmont has a positive weekly chart with its five-week modified moving average at $24.43. We show a weekly pivot at $25.05 with an annual risky level at $34.58.

The second biggest year-to-date gainer is Microsoft ($39.69), up 6.1%. Microsoft recently suspended support of the still-popular Windows XP operating system, suggesting that users of XP upgrade to Windows 8.1.

The problem with this is that older PCs will not run this version on Windows. For more on the issue, see my April 7 article, "Will Investors Support Microsoft After It Ends Windows XP Support?" But the short answer is that the end of XP support seems like a bad move for Microsoft. In my judgment Microsoft has left many retailers and small businesses high and dry -- 30% of all personal computers still run on Windows XP.

The weekly Microsoft chart shifts to negative given a weekly close below the five-week MMA at $39.22. Quarterly and annual value levels are $35.05 and $34.02, with weekly and monthly risky levels at $40.57 and $42.77.

The biggest year-to-date loser is Amazon (AMZN) ($324.58), down 18.6%. The stock has been below its 200-day SMA at $342.59 since April 3. It traded as low as $305.50 on April 15. I covered this stock on March 28 in, "Pop! Goes the Momentum Bubble."

Amazon's weekly chart is negative but oversold, with the five-week MMA at $338.02. An annual value level lags at $259.67 with an annual pivot at $334.95, and semiannual risky levels at $351.24 and $359.11.

Down 10.3% year-to-date is Baidu (BIDU) ($159.58) the Chinese-language Internet search provider. Baidu traded to an all-time intraday high at $189.34 on March 7, then plunged to as low as $140.66 on April 7. Now it is positioned above its 200-day simple moving average at $154.16. The weekly chart shifts to positive on a weekly close above its five-week MMA at $158.18. This week's value level is $145.83, with a monthly risky level at $185.01.

Down 10.2% year-to-date is Starbucks (SBUX) ($70.39) has been below its 200-day SMA at $74.88 since April 1, trading as low as $67.93 on April 15. The weekly chart is negative, with its five-week MMA at $71.88. Annual value levels are $53.76 and $41.84, with a weekly pivot at $71.73 and quarterly and semiannual risky levels at $73.50 and $78.52.

Our number-crunching tables follow on page 2.

In the first "crunching the numbers" table, we show one stock oversold -- and that's Amazon. Only four stocks have rising stochastics and nine show declining stochastics. Seven are above their five-week modified moving averages and seven are below.

In the second "crunching the numbers" table, we show that only four of the stocks are trading under the influence of monthly, quarterly and annual pivots. Six have weekly pivots, but that's only a potential influence this week.

Your investment policy among these stocks depends on whether or not you are a buyer on weakness or a seller of strength. We advocate using a GTC (good until 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 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.

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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