From Europe to Earnings Season: Alcoa, JP Morgan, Google

Will hopes over corporate earnings trump enduring anxieties over Europe? The first week of earnings season will provide a glimpse into the industrial, financial and online sectors of the economy, with Alcoa, ^JPM^ and ^GOOG^ all scheduled to report quarterly earnings over the next few days.

Stocks were dramatically higher on Monday meaning that absent major negative news overnight, traders will encounter a short term, overbought market for stocks once again when trading begins on Tuesday.

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Our most recent Daily Double 7s stock, ^BBY^ closed in overbought territory for a second day in a row ahead of trading on Tuesday. The stock finished a volatile session up by more than 1%. To find out our Daily Double 7s stock for Tuesday, see below.

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Here are 7 Stocks You Need to Know for Tuesday

^AA^ is scheduled to kick off earnings season on Tuesday. The stock has trended higher over the past week after dropping to its lowest levels of the year, adding more than 4% on Monday alone.

With the stock’s recent gains and an earnings announcement around the corner, traders may want to be wary of AA in the near-term. The stock has also earned “consider avoiding” 3 out of 10 based on its recent price movement, and could be available at lower levels over the next few days.

Up more than 5%, shares of ^AAPL^ continued to follow-through to the upside as traders and investors celebrated news that the preorders for the company’s iPhone 4S topped one million on the first day.

As ^NFLX^ reversed its policy separating its streaming video and DVD-by-mail businesses, so did the company’s stock reverse lower after a strong open. Shares of NFLX were trading lower by more than 4% by Monday’s close, finishing at new lows below the 200-day moving average.

Big moves in media. Shares of both ^CBS^ and ^VIA.B^ rallied to new short-term highs ahead of trading on Tuesday. Both CBS and VIA.B gained more than 6% heading into trading on Tuesday.

Shares of ^S^ have lost more than 25% in the two days since being downgraded to a “consider avoiding” 3 out of 10 in our quantified stock lists. S dropped by more than 8% on Monday, finishng at a new short term closing low.

The Daily Double 7s stock for Tuesday is ^BHI^. Shares of BHI rallied by more than 5% as broad-based buying in the energy sector continued. The buying has pushed the stock to a new, short term high below the 200-day moving average, as well into technically overbought territory.

Read more about the Double 7s Strategy in the book by Larry Connors: Short Term Trading Strategies That Work: A Quantified Guide to Trading Stocks and ETFs – now available for free.

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David Penn is Editor in Chief of TradingMarkets.com