Ulta Salon Surges, Lululemon Gets Sheared on Earnings Volatility

NEW YORK (TheStreet) -- Earnings winners outpaced the losers this week, as post-earnings volatility continues.

Ulta Salon (ULTA) was the biggest winner, gaining 10%, while Lululemon (LULU) was the only loser, plunging by 16%. The stocks' movements continue the trend of seeing both pre-earnings and post-earnings stock-specific volatility.

Here are the updated profiles for the post-earnings winners and loser, which are followed by two "crunching the numbers" tables.

H&R Block (HRB) ($32.36), up 6.8% since June 6, after being up 4.4% year to date. The company beat analysts' earnings-per-share estimates by 17 cents, earning $3.36. The stock set an all-time intraday high at $32.77 on Thursday after being above is 200-day simple moving average at $28.90 since May 21.

The weekly chart is positive with its five-week modified moving average at $29.87. The stock moved above our monthly risky level at $32.36, becoming a monthly pivot which was then tested at Thursday's close. Weekly and semiannual value levels are $30.38 and $21.42, respectively, with the monthly pivot at $32.36 and quarterly risky level at $33.56.

Lululemon (LULU) ($37.25), down 16% since June 6, after being down 25% year to date. The company beat analysts' EPS estimates by 2 cents, earning 34 cents. The stock set a multiyear intraday low at $37 on Thursday on a weak forecast and revenue.

The weekly chart is negative, but oversold with its five-week MMA at $44.40. The stock has been below its 200-week SMA at $56.66 since mid-January. The stock broke below its weekly value level at $39.11, becoming a weekly pivot. A monthly value level is $33.90 with a weekly pivot at $39.11 and quarterly risky level at $53.04.

Pep Boys (PBY) ($10.85), up 2.1% since June 6, after being down 12% year to date. The company beat analysts' EPS estimates by a penny, earning 4 cents. The stock popped to $11.46 on the better-than-expected results, but could not sustain gains above our quarterly risky level at $11.22. The stock thus remains below its 200-day SMA at $12.06 as it has been since April 10.

The weekly chart shifts to positive given a close this week above its five-week MMA at $10.73 with upside to the 200-week SMA at $11.67, still to be tested. Weekly and quarterly value levels are $8.80 and $8.04, respectively, with quarterly and semiannual risky levels at $11.22 and $13.72, respectively.

Ulta Solon (ULTA) ($95.00), up 10% since June 6, after being down 11% year to date. The company beat analysts by 3 cents, earning 77 cents. The stock traded as high as $98.61 on June 11, staying shy of its 200-day SMA at $100.80. The stock has been below its 200-day SMA since March 26.

The weekly chart shows oversold stochastics but shifts to positive next week on a weekly close above its five-week MMA at $89.19 as the 200-week SMA at $78.25 solidifies as support. Weekly and monthly value levels remain at $82.86 and $76.69, respectively, with quarterly and semiannual risky levels still at $102.71 and $120.79, respectively.

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.

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.

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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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