9 Previews: Jungle of Earnings Includes Amazon
The most important earnings report is Amazon (AMZN) , an obvious momentum stock with a growth story. Amazon traded to a new all-time high at $284.72 last Friday, Jan 25.
Stocks are approaching dangerous overvalued readings according to www.ValuEngine.com. This morning we show that 62.4% of all stocks are overvalued, and as I explained on Jan. 25 in Market Hasn't Peaked a reading of 65% and higher is a warning for the stock market. Only 37.6% are undervalued and only 14.7% of these are undervalued by 20% or more. This reflects limited additional upside for the stock market.
ValuEngine also shows that all 16 sectors are overvalued, nine by double-digit percentages. The seven sectors represented by the stocks profiled here are overvalued: aerospace by 6.8%, computer & technology by 15.7%, consumer discretionary by 9.2%, medical by 16.0%, oils-energy by 6.5%, retail-wholesale by 15.8% and transportation by 24.9%.
Reporting before the open on Tuesday Pfizer (PFE) ($26.84) is expected to earn 44 cents per share. PFE has a buy rating and set a new multi-year high at $27.30 on Jan. 24. The daily chart shows a negative divergence in momentum and the weekly chart is positive with the five-week modified moving average at $25.91. The stock has a buy rating and is 30.4% overvalued with a monthly value level at $25.47 and a quarterly pivot at $27.13.
Reporting after the close on Tuesday Amazon (AMZN) ($276.04) is expected to earn 29 cents per share. AMZN has a hold rating, is 33.9% overvalued with a ludicrous 12-month trailing price-to-earnings at 776.5, and set a new all-time high at $284.72 on Friday. The daily chart is overbought, as is the weekly chart with the five-week MMA at $262.09. My quarterly value level is $255.75 with a weekly pivot at $275.00 and semiannual risky level at $305.64.
Reporting before the open on Wednesday Boeing (BA) ($74.00) is expected to earn $1.19 per share. BA has a buy rating and is below its 52-week high at $78.02 set on Jan 4. The daily chart is negative and the weekly chart shifts to negative with a close this week below the five-week MMA at $74.87. My monthly value level is $68.59 with a weekly pivot at $76.27 and a quarterly risky level at $79.34.
Reporting after the close on Wednesday Qualcomm (QCOM) ($63.67) is expected to earn $1.00 per share. QCOM has a buy rating and is trading between its March 27, 2012 high at $ 68.87 and its July 17, 2012 low at $53.09. The daily chart is negative with a positive weekly chart and the five-week MMA at $63.08. My monthly value level is $56.74 with a weekly pivot at $62.94 and annual risky level at $64.58.