| TonlRinla |
11-12-2012 04:58 AM |
Five Stocks To Buck The Downtrend| Year-to-date the gain for the Dow Industrial Average has slipped to just 3.2% with the NASDAQ dipping into negative territory year to date. Technicians claim that a 5% to 7% downside move is a pullback but as my table below shows the major equity averages are down 7.2% to 10.6% since their May 2 highs. Market 10-Jun YTD 31-Dec 2011 Date of % Off Price Gains Price Highs Highs Highs The Dow 11 replica bell & ross geneva watches replica michele csx watch 952.00 3.2% 11 578.00 12 876.00 2-May-11 -7.2% S&P 500 1 271.00 1.1% 1 christian dior replica watch 257.60 1 370.58 2-May-11 -7.3% Nasdaq 2 644.00 -0.3% 2 653.00 2 swiss christian dior replica watches 887.75 2-May-11 -8.4% Naz 100 (NDX) 2 221.00 0.1% 2 217.86 2 417.83 2-May-11 -8.1% Transports 5 061.00 -0.9% 5 107.00 5 565.78 2-May-11 -9.1% Russell 2000 779.54 -0.5% 783.65 868.57 2-May-11 -10.3% Semis (SOX) 402.80 -2.2% 411.82 450.79 2-May-11 -10.6% This recent downturn appears to be more than a pullback. We are seeing the major averages in full-blown “correction” territory. I believe that there remains significant downside risk in the weeks and months ahead. My technical metrics and my read of the fundamentals from ValuEngine.com show that stocks are not undervalued yet and the weekly charts for the major equity averages remain negative. At Friday’s close only 39.7% of all stocks were overvalued– therefore 60.3% are undervalued. Only four of 16 sectors are calculated to be overvalued according to the ValuEngine.com valuation model. If we take a look at these figures historically we find that we are nowhere near the cheap valuations that helped propel the March 2009 to May 2011 bull market. Back then more than 90% of all stocks were undervalued and all eleven sectors tracked at that time were significantly undervalued. This is why in my weekly stories for Forbes.com I have been recommending selling strength and booking profits replica swiss watches particularly for stocks trading at all time highs and multi-year stocks. If you recall we saw some valuation watches and warnings from ValuEngine.com recently and I warned that these signals have proven timely in the past. The predicted market dip certainly seems to have occurred. For those who heeded my advice to raise cash and book profits you have some powder dry and ready. Here are a few candidates for my Buy and Trade strategy. These stocks have BUY ratings according to ValuEngine.com and have had steep sell offs recently. Don’t forget to employ Good Until Cancelled (GTC) limit orders to buy weakness to the value levels shown for these names. Akamai Technologies (AKAM) – ($29.45) The stock has a one-year price target at $31.47 according to ValuEngine.com and just broke below its 200-week simple moving average at $30.64 last week with an oversold condition. My weekly value level is $29.15 with a monthly risky level at $33.61. Goodyear Tire (GT) – The stock has a STRONG BUY rating according to ValuEngine.com with a one-year price target at $17.50. The daily chart is oversold with the stock below its 50-day simple moving average at $16.49 with the 200-day at $13.05. My semiannual value level is $11.41 with a monthly risky level at $17.31. Transocean (RIG) – ($62.85) The stock has a one-year price target at $68.26 according to ValuEngine.com with an oversold daily chart. My weekly value level is $61.16 with my monthly risky level at $80.99. United Parcel Services (UPS) – ($68.50) The stock has a one-year price target at $74.99 according to ValuEngine.com. The daily chart is oversold with the stock below its 200-day simple moving average at $71.30. My quarterly value level is $66.60 with a weekly risky level at $72.08. Wal-Mart (WMT) – ($52.72) The stock has a one-year price target at $56.29 according to ValuEngine.com. The stock moved below its 200-day simple moving average at $53.91. My annual value level is $52.54 with a semiannual pivot at $53.60 and semiannual risky level at $57.31. 0 comments 0 called-out |
