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Six Downgrades Sock Stocks in the SOX

Tickers in this article: AMD INTC NVDA SOXX TXN
NEW YORK ( TheStreet) -- The PHLX Semiconductor Sector Index (SOXX) has gained 12.4% since setting a fiscal cliff bungee bottom at 349.79 on Nov. 16. On Wednesday the SOX had a gap open above its 200-day simple moving average at 388.68. Even so the SOX is 12.5% below its 2012 high at 444.96 set March 27.

The last time I profiled stocks in the SOX was on Sept. 25 in The SOX May Provide Another Warning as this index gapped below its 200-day SMA setting the stage for the down trend to that Nov. 16 low.

Among the 10 stocks I profiled in that post six were rated buy according to www.ValuEngine.com. Since then each of these names have been downgraded to hold.

The computer and technology sector is 9.9% overvalued with the electronics semiconductor industry 16.4% overvalued.

The daily chart for the SOX (389.69) shows rising momentum with the index above its 21-day, 50-day and 200-day SMAs at 377.20, 372.80 and 388.68. My weekly value level is 379.60 with quarterly risky level at 439.97.

Chart Courtesy of Thomson/Reuters

Reading the Table

OV/UN Valued: The stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine.

VE Rating: A "1-engine" rating is a strong sell, a "2-engine" rating is a sell, a "3-engine" rating is a hold, a "4-engine" rating is a buy and a "5-engine" rating is a strong buy.

Last 12-Month Return (%): Stocks with a red number declined by that percentage over the last 12 months. Stocks with a black number increased by that percentage.

Forecast 1-Year Return: Stocks with a red number are projected to decline by that percentage over the next 12 months. Stocks with a black number in the table are projected to move higher by that percentage over the next 12 months.

Value Level: The price at which to enter a GTC limit order to buy on weakness. The letters mean; W-weekly, M-monthly, Q-quarterly, S-semiannual and A-annual.

Pivot: A level between a value level and risky level that should be a magnet during the time frame noted.

Risky Level: The price at which to enter a GTC limit order to sell on strength.

Applied Materials (AMAT) ($11.34 vs. $11.35 on Sept. 25): AMAT still has a hold rating, is 19.4% undervalued with a 12 month trailing P/E at 16.2. My weekly value level is $10.61 with a quarterly risky level at $12.76. Note that Wednesday's close was just above the 200-day SMA at $11.27.

Advanced Micro Devices (AMD) ($2.52 vs. $3.46 on Sept. 25): AMD has been downgraded to hold since the Sept. 25 post and is 47.2% undervalued. My weekly value level is $2.12 with a semiannual risky level at $4.76. AMD has been below its 200-day SMA at $4.81 since May 30.