How to Trade Earnings for Deere, Macy's, SodaStream, 4 Others

NEW YORK (TheStreet) -- Today we crunch the numbers on two companies that report their quarterly earnings after the closing bell Monday, one after the closing bell on Tuesday and four before the opening bell on Wednesday.

The profiles below provide trading guidelines for the stocks in two 'crunching the numbers" tables that follow.

Deere & Co.  (DE) ($94.34), up 3.3% year to date. Analysts expect the producer of agricultural equipment to report earnings per share of $2.40 before the opening bell on Wednesday. The stock traded as low as $83.41 on Feb. 5, which was below its 200-day simple moving average, and went as high as $95.89 on Thursday, well above the 200-day SMA at $86.36.

The weekly chart is positive but overbought with its five-week modified moving average at $91.78 and the 200-week SMA at $82.54. Monthly and quarterly value levels are $91.51 and $90.50, respectively, with weekly and semiannual risky levels at $97.37 and $108.07, respectively.

Diana Shipping (DSX) ($10.74), down 19% year to date. Analysts expect the shipper of bulk cargoes such as iron ore, coal and grain to report a loss of 9 cents a share before the opening bell on Wednesday. The stock set a multiyear intraday high at $13.93 on March 6, and traded as low as $10.56 on Friday, well below its 200-day SMA at $11.90.

The weekly chart is negative but oversold its five-week MMA at $11.67 with its 200-week SMA at $10.03. Semiannual value levels are $7.70 and $6.28 with a weekly pivot at $10.84 and quarterly and monthly risky levels at $11.40 and $ 13.12, respectively.

Macy's  (M) ($56.35), up 5.5% year to date. Analysts expect the operator of department-store chains including Bloomingdale's, Burdines and Rich's to report EPS of 59 cents before the opening bell on Wednesday. The stock set an all-time high at $61.26 on April 4, and traded as low as $54.82 on Wednesday.

The weekly chart is negative with its five-week MMA at $57.10. Semiannual and quarterly and monthly value levels are $54.05 and $52.73, respectively, with a weekly pivot at $56.71, and semiannual and monthly risky levels at $57.19 and $52.51, respectively.

McKesson  (MCK) ($171.00), up 5.9% year to date. Analysts expect the health care-services and technology company to report EPS of $2.38 after the closing bell on Monday. The stock set an all-time intraday high at $188.02 on March 21, and traded as low as $162.90 on April 11.

The weekly chart shifts to negative given a close this week below its five-week MMA at $170.87. Quarterly and weekly value levels are $166.02 and $161.34, respectively, with a monthly risky level is $207.11.

Rackspace Hosting (RAX) ($26.28), down 33% year to date. Analysts expect the provider of information-technology services to report EPS of 12 cents after the closing bell on Monday. The stock has been on a downward spiral since setting an all-time intraday high at $81.36 on Jan. 24, 2013, and it set a multiyear low at $26.18 on Friday.

The weekly chart is negative but oversold with its five-week MMA at $30.56. A weekly value level is $25.42 with monthly and quarterly risky levels at $31.93 and $37.81, respectively.

SodaStream (SODA) ($41.60), down 16% year to date. Analysts expect the maker of home beverage carbonation systems to report EPS of 2 cents before the opening bell on Wednesday. The stock has been below its 200-day SMA since Oct. 30, and traded as low as $35.27 on Feb. 3. It then rebounded to as high as $47.30 on April 23, below its 200-day SMA at $51.52.

The weekly chart shifts to positive on a close this week above its five-week MMA at $41.59. A monthly value level is $32.66 with weekly and quarterly risky levels at $43.51 and $65.77, respectively.

Take-Two Interactive (TTWO) ($20.38), up 17% year to date. Analysts expect the developer of interactive software games to report EPS of 4 cents after the closing bell on Tuesday. The stock set a multiyear intraday high at $22.41 on March 18, and traded as low as $19.18 on April 15.

The weekly chart is negative with its five-week MMA at $20.46. Monthly and semiannual value levels are $19.74 and $16.68, respectively with a weekly pivot at $19.97.

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 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 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.

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.

>>Read More: Now We Learn Why Facebook Acquired Oculus

>>Read More: Apple's Next Big Acquisition After Beats

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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