Six Downgrades Sock Stocks in the SOX
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.