Stocks are overvalued fundamentally according to ValuEngine and technically overbought. At the helm of gain extremely high for fourth-quarter earnings reports. It is extremely difficult to justify new long positions before earnings account required that last week we found less than 35% of all stocks undervalued.
When less than 35% of all stocks are undervalued stocks tend have a downside correction or enter a bearish market. Market bottom tend to occur when more than 65% of all stocks are undervalued.
In April 2002, the percentage of undervalued stocks plunged 32%, resulting in a bearish market the October 2002 low when 85% of all stocks were dumped.In March 2003, the undervalued stocks percentage was 85% that American troops headed Baghdad.Moving forward to 2007, tempered undervalued stocks percent to 28 percent in June 7 and October 2007 all the major averages and sectors have experienced a major top. This bear market was directed initially by one high in constructors in mid-2005, a high-grade community banks at the end of 2006 by the regional banks in February 2007.In March 2009 the percentage of stocks undervalued was 91% and proved to be a weak market.In stock this week, I will assume that readers are long and looking for a pre-earnings policy guidelines "buy and trade" and in response to gains. Five stocks represents this week over-valued 17.3%, Basic Industries, Construction, overvalued by only 0.2%, two finance, overvalued by 6.4% and computer technology & overvalued by 9.1%.
Monday, we launched earnings season with earnings from alcoa (AA) ($ 16.42), beats earnings expected from 19 cents per share 2 cents. Alcoa is rated a hold according to ValuEngine with fair value at 4 p.m. $20 and a target price for one year at $17,17. My level of quarterly value is $ rental with an annual pivot at $15,81 and annual risky level at $26.93. Tenant $15,81 is key to this earnings report.
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Tuesday, we receive gains of lennar (len) (annex$) should save two cents per share of home builders. Lennar is valued at a dock according to ValuEngine with fair value at $24.16 and a one-year price target to $19.08, therefore it is limited to. My monthly value level is $11.57 with a quarterly risk level at $pass.
On Wednesday, we hear from Community Bank First Midwest Bank (FMBI) ($ 12.51) expected to lose three cents per share. First Midwest is noted a strong sell according to ValuEngine with fair value at $6.60 and a one-year price target to $10.57. My monthly value level is $7.97 with my annual risky level at $23.73. First Midwest is an overvalued/overbought stock that will likely be highly vulnerable to an earnings disappointment. This Bank is overexposed to Commercial real estate loans.
Thursday, we receive earnings from technology bellwether Intel (intc) ($20.66) should win 53 cents per share. Intel is rated a buy according to ValuEngine with fair value at $23.15 and a target price for one year at $22.10. My monthly value is $17.52 with a bi-annual pivot at $20.86 and semi-annual risky level at $22.04. The stock is undervalued with MOJO mounted on its daily chart. Intel has been added to the ValuTrader model portfolio to $20.80 January 3.
Friday hear us "too fail" jpm (JP Morgan Chase) ($ 43.64) should win 98 cents per share. JPM is rated a hold according to ValuEngine with fair value at $45.35 and a target price for one year at $43,22. My annual value level is $40.77 with a quarterly risk level at $46.35.
The ValuEngine rating model
5-Engine is a purchase of projected Strong Buy 12% or for twelve months.
4 - Engine is a purchase - planned to rally the 5 to 12% for 12 months.
Engine 3 is a dock - is expected to decrease by more than 5% or buy no more than 5% in the next twelve months.
Engine 2 is a sale - expected a decline of 5% to 12% for 12 months.
1 - Engine is a strong sell - provides a decrease of 12% or for twelve months.
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