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Earnings Play: Short Abbott Labs

by Jon Lewis 04/09/09

Next week is crammed with huge earnings reports, and that means plenty of trading opportunities … finally. I've been waiting for this week for a while now, especially with the market caught in a bit of a trading range for the past two to three weeks.

More Trading Ideas

The table below lists stocks on my radar that I'm considering for trades. It includes their report date and what analysts currently expect for profit growth (compared to the same quarter a year ago). I've also included my favorite technical measure -- the 50-day moving average -- so you can see potential support or resistance.

Finally, I give an idea of the overall sentiment toward the stock based on our various indicators. Keep in mind that optimistic sentiment represents higher expectations and, thus, can create some vulnerability if those expectations aren't met. Conversely, pessimism reflects lower expectations that often lead to upside earnings surprises. (See 12 Keys to Trading Earnings for Profits.)

Here's the table for next week. Note that sentiment is optimistic or mixed on four stocks that currently reside below their respective 50-day moving averages.

Stock	Ticker	4/07 Close	50-day MA	Sentiment	Earnings Date	Profit Growth Expectation
Abbott Labs	ABT	42.92	50.11	Optimistic	4/15	+13%
Baxter International	BXT	48.32	53.85	Optimistic	4/16	+9%
Intel	INTC	15.45	14.05	Optimistic	4/14	-92%
Johnson & Johnson	JNJ	51.36	53.18	Optimistic	4/14	+3%
Vertex Pharmaceuticals	VRTX	26.23	30.39	Mixed	4/16	-14%

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