As DJIA Reaches Records, Six Dow Components Are Set to Report

NEW YORK (TheStreet) -- Six Dow components are scheduled to report their quarterly financial results before the opening bell on Tuesday as the Dow Jones Industrial Average, which was up 3.2% so far this year through Friday's close, hits record highs.

Travelers (TRV) is up 5.3% year to date, and Verizon (VZ) is up 3.3%. But three company set to report -- DuPont (DD), McDonald's (MCD) and United Technologies (UTX) -- have negative weekly chart profiles, and the other company to report, Coca-Cola (KO), has the highest 12-month trailing price-to-earnings ratio at 20.6.

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Spotting This Stock Chart Pattern Could Make You A Lot of Money

Let's take a look at the stock profiles. Two "crunching the numbers" tables follow.

Coca-Cola ($42.43) set a 52-week intraday high at $42.49 on June 30 after popping above its 200-day SMA at $39.74 on April 15.

Analysts expect the company to report earnings of 63 cents per share. Its dividend yield is 2.9%.

The weekly chart is positive but overbought with its five-week MMA at $41.60. Monthly and quarterly value levels are $40.74 and $40.35, respectively, with a weekly pivot at $42.96 and semiannual and annual risky levels at $43.67 and $43.98, respectively.

DuPont ($65.55) set a multiyear intraday high at $69.75 on June 9, and enters the week just above its 200-day simple moving average at $64.38.

Analysts expect DuPont to report earnings per share of $1.18. The company's 12-month P/E ratio is 17.3, and its dividend yield is 2.8%.

The weekly chart is negative with its five-week modified moving average at $66.50. Annual value levels lag at $53.11 and $42.11, respectively, with a weekly pivot at $66.15 and quarterly and semiannual risky levels at $67.23 and $69.18, respectively.

McDonald's ($98.99) traded at an all-time intraday high at $103.78 on May 14, and is just above its 200-day SMA at $97.74.

Analysts expect the company to report earnings of $1.43 per share. The company's 12-month trailing P/E ratio is 17.8; its dividend yield is 3.3%.

The weekly chart is negative with its five-week MMA at $100.61. A semiannual pivot is $99.30 with weekly and monthly risky levels at $100.37 and $101.23, respectively.

Travelers ($95.34) set an all-time intraday high at $96.18 on June 20, well above is 200-day SMA at $88.08.

Analysts expect the company to report earnings of $2.06 per share. The company's 12-month trailing P/E ratio is just 9.5; its dividend yield is 2.3%.

The weekly chart is positive but overbought with its five-week MMA at $93.85. Monthly and semiannual value levels are $92.88 and $88.50, respectively, with a weekly pivot at $96.81 and semiannual and quarterly risky levels at $99.73 and $104.12, respectively.

United Technologies ($113.57) set an all-time intraday high at $120.66 on April 22, and went as low as $112.44 on July 10. Its 200-day SMA is $113.23.

Analysts expect the company to report earnings of $1.79 per share. The company's trailing P/E ratio is 17.5; its dividend yield is 2.1%.

The weekly chart is negative with its five-week MMA at $115.56. Semiannual and annual value levels are $105.86 and $103.38, respectively, with weekly and semiannual risky levels at $116.82 and $122.52, respectively.

Verizon ($50.75) set a 2014 intraday high at $51.01 on July 16, and has been above its 200-day SMA at $48.43 since May 16.

Analysts expect the company to report earnings of 90 cents per share. The company's trailing P/E ratio is 16; its dividend yield is 4.2%.

The weekly chart is positive but overbought with its five-week MMA at $49.64. Annual and monthly value levels are $49.93 and $47.02, respectively, with a weekly pivot at $50.07, and quarterly and semiannual risky levels at $51.92 and $52.40, respectively.

Crunching the Numbers with Richard Suttmeier: Moving Averages & Stochastics

This table provides the technical status for the stocks profiled in today's report.

The 12-month trailing price to earnings ratio

The Dividend Yield

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.

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.

TheStreet Ratings team rates MCDONALD'S CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate MCDONALD'S CORP (MCD) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • MCD's revenue growth has slightly outpaced the industry average of 8.4%. Since the same quarter one year prior, revenues slightly increased by 1.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.86, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.28, which illustrates the ability to avoid short-term cash problems.
  • 43.68% is the gross profit margin for MCDONALD'S CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.98% is above that of the industry average.
  • Net operating cash flow has increased to $1,907.30 million or 13.06% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -21.57%.
  • MCDONALD'S CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MCDONALD'S CORP increased its bottom line by earning $5.56 versus $5.36 in the prior year. This year, the market expects an improvement in earnings ($5.75 versus $5.56).

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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