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BEHIND THE MONEY: J&J Leads List of Likely Earnings Season Beats

Going by historical precedent and recent chart strength, Johnson & Johnson leads a list of companies most likely to beat Street estimates this earnings season and subsequently trade higher. Johnson & Johnson reports tomorrow morning.

Starting with a list of "stocks that beat the most" from Birninyi Associates, the sharp research firm run by legendary trader Laszlo Birinyi, and then cross checking this with a list of stocks "whose charts suggest earnings will be good" from Carter Worth, Oppenheimer Asset Management chief market technician and frequent Fast Money guest, J&J came back as a match.

Johnson & Johnson beats 96 percent of the time, according to Birinyi, a firm you may want to listen to. Among the companies also on its list was Black & Decker , which is leading the market higher today after pre-announcing that they would exceed third-quarter's earnings estimates.

Meanwhile, Johnson & Johnson is breaking out above past resistance at $61, likely why Worth put it on his 'beat' list. "There are - history has shown - certain patterns in day-to-day trading that suggest money in aggregate is moving into a name in anticipation of good news," wrote Worth, in his note to clients today.

Another one of my favorite research firms, Bespoke Investment Group, ran the numbers and found a list of companies that have beaten earnings estimates 100 percent of the time the last eight quarters. Two small caps, CyberSource and PetMed Express , make Bespoke's screen and Worth's list of technical strength.

CyberSource, an electronic payment processor, is up more than 50 percent this year before its report expected next week.

PetMed, a mail order pet pharmacy, is breaking out recently, up 35 percent the last 3 months before its report on Oct. 19.

The profit parlor game can be risky so be careful to hedge your trades, but if recent and long-term history is any guide, these stocks may be winners.

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Trader disclosure: On October 12, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (BTU), (MSFT), (NUE); Seymour Owns (AAPL), (BAC), (F), (MGM), (MSFT), (BX), (POT); Seymour Owns Shares Of Gazprom; Finerman's Firm Owns (BAC), (BAC) Calls, (BAC) Call Spreads, (BAC) Preferred; Finerman Owns (BAC), (BAC) Preferred; Finerman's Firm Owns (CSCO), (MSFT), (TGT), (WMT), (YUM), (PLCE); Finerman's Firm Owns (WLP) Calls; Finerman's Firm Owns (UNH) Calls; Finerman's Firm Is Short (IJR), (MDY), (IWM), (UNG), (USO); Finerman's Firm And Finerman Own (WFC) Preferred; Terranova Owns (JPM), (NOV); Terranova Is Short (GRMN); Terranova Is Short (CCL); Terranova Owns Dec. 2009 Gold Futures; Terranova Owns Dec. 2009 Crude Oil Futures; Terranova Owns Dec. 2010 Crude Oil Futures; Terranova Works For (VRTS)

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