Earnings Season | Strong Investor Stocks
This blog will take a look at the earnings season and some very strong investor stocks for the rest of 2012 and into 2013. It will be the start of a new investor series titled Strong Investor Stocks. Last week finished up validating MR’s Wednesday night forecast of a flat to down day on Thursday followed by a selloff towards our 1,350 target area on Friday due to our prediction of a disappointing jobs number. The low for the S&P 500 on Friday reached 1,348 and bounced late to finish at 1,354.
As MR detailed Wednesday night, the market was extended on the technicals and was overdue for a pullback. Our forecast for a pullback remains the 50 SMA (now 1,339) before a potential bounce higher. Monday could try to test the 1,339 price on early weakness before finding support and then bouncing mid-week on better than expected earnings’ numbers.
If Europe can continue to move forward with a unanimous vote on the EU Summit Proposals, and can avoid any immediate landmines, US earnings season could move our markets higher. The sentiment is quite negative and the expectations for good earnings are low which makes upside earnings’ surprises and a move up in the market a real possibility for this week and maybe longer.
The markets are stuck in the middle of their choppy range (at 1,354) between 1,300 on the low side and 1,400 on the high side. It is a battle being waged with decent earnings and valuations in the US market against struggling emerging markets and Europe. And with China heading down a slower growth path, the commodities and energy stocks have also been holding the markets back. Not all stocks are struggling. Take a look at some of our strong investor stocks below.
Earnings Season Could Have Upside Surprises for Bulls – Strong Investor Stocks
While MR heads into the week with a bullish bias after the S&P 500 first tests the 50 SMA on a bit more selling, it will be all about earnings. If corporate earnings actually don’t have as many upside surprises as we expect, then the 200 SMA (1,303) could get tested again before an attack at 1,400.
Power Stock Picks – Strong Investor Stocks (July 8):
July 4th’s power stocks are still a buy and SUPN was a huge winner with a 26% gain on Friday in a very negative market.
Earnings’ season is always a wild card when buying in front of company earnings. Because we are expecting a decent number of upside surprises, MR is starting an investor series based on top 2012 stock performers. We are calling this series Strong Investor Stocks. In this first group, it is a diversified mix of high quality companies that have performed very well in the first half of the year.
Several of these strong investor stocks could be entered at better prices on pullbacks but all have the potential for more upside in 2012. Very strong investor stocks hitting near new highs usually head higher. Just be careful if their earnings disappoint because they can come off hard from the top.
MR recommends investors continue to remain cautious and lighter on riskier equities until after the longer term financial situation in Europe has more clarity. The short term is neutral with the potential for a higher move into earnings season.
Gold and silver are starting to look more attractive after basing and oil is getting a short term pop that may last awhile into the summer.
The caution alert for retirement accounts and investors is still present and will remain for the foreseeable future.
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