National Semiconductor and American Eagle May Be Good Stock Plays
Investors are will still be focused on technical levels this week after the major averages breached their November lows last week, dropping to levels not seen since 1997. Fourth-quarter earnings reports are also coming to a close, moving attention toward the economy and rescue plans by the Treasury, Federal Reserve and Obama Administration.
However, a few earnings reports of note remain, including National Semiconductor
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PowerRating) and Hovnanian Enterprises
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PowerRating). Investors will also the latest retail sales figures for February.
On Wednesday, National Semiconductor is due with out with its fiscal third-quarter results before the market opens. The chip maker is expected to report a loss of five cents a share, compared with a profit of 28 cents a share a year ago, on revenue of $296.8 million, according to Reuters Estimates. The company guided for a weak third quarter, saying sales will be lower sequentially by about 30%. The stock has fallen 36% over the past 12 months and is bouncing around 2003 levels.
NSM has largely narrowed or reversed its extended-hours move the next day after an off-hours earnings report. Near-term, it has cut its extended-hours performance in three of the last four quarters. Investors betting long on this one may want to get out before the regular session. On December 8, the stock dropped 7.2% after its second-quarter missed estimates. Shares reversed course in the following regular session, however, finishing up 13.2%.
American Eagle Outfitters Inc.
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This stock is one longs may want to take a second look at. In the last 15 earnings-driven extended-hours events MidnightTrader.com has tracked, AEO has followed through with more aggressive next-day, same-direction trade in its move in nine of 15 of the following regular-hours trading sessions. In the near-term, the stock favors a widening trend, adding to its extended-hours performance in the following regular session in two of the last four quarters.
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Cassie Slane is a Senior Editor at www.MidnightTrader.com.