Buy Apple, hold Google, sell Amazon
These 3 companies still have 3 very different profiles.
By Richard Suttmeier
It continues to be a tale of three different profiles for Apple (AAPL), Amazon.com (AMZN) and Google (GOOG).
On Feb. 5, I wrote "Bobbing for Apple, Amazon and Google shares" on TheStreet, and presented my three-pronged analysis for these benchmark investments and trading vehicles.
The first prong of an analysis is the fundamental screenings, according to www.ValuEngine.com. The second is looking at daily, weekly and monthly chart patterns. The weekly chart profile is the most important. The third is my "buy and trade" parameters: Where to buy on weakness -- prices called value levels -- and where to sell on strength -- prices called risky levels.
Apple ($431.14) set a 52-week low at $419.00 on Monday, holding my annual value level at $421.05, which was presented in my Feb. 5 post as the next value level at which to buy on further weakness.
Apple still has a "buy" rating, is 24% undervalued with a twelve-month forward price-to-earnings (P/E) ratio of 8.95, which makes the stock a value play, not a momentum trade as it was until it traded above $700 on Sept. 21, when it reached the ValuEngine one-year price target at the time. Today's one-year price target is $463.54.
The weekly chart profile remains extremely oversold with a 12x3x3 weekly slow stochastic reading at 11.30, well below the oversold threshold of 20.00. The 200-week simple moving average (SMA) is $363.75 with the five-week modified moving average (MMA) at $462.80. My weekly value level is $397.60 with annual pivot at $421.05 and semiannual pivot, now a risky level at $470.21. My annual risky level remains at $510.64.
Amazon.com ($275.59) had a hold rating back on Feb. 5, but with new monthly benchmark data from ValuEngine the stock has been downgraded to sell with the stock below its Jan. 25 high at $284.72.
Amazon is 71.1% overvalued with a twelve month forward P/E ratio at 171.9. The weekly chart shifts to neutral with a close this week above its five-week MMA at $266.29.
The 200-week SMA lags at $175.17.
My quarterly value level is $255.75 with a monthly pivot at $275.15 and a weekly risky level at $277.07, so profits should be taken with the stock between these levels. My semiannual risky level is $307.64.
Google ($838.60) continues to have a "hold" rating and set a new all-time high at $840.14 on Tuesday. Google is 3.3% overvalued according to ValuEngine with a twelve month forward P/E ratio at 16.61. The one-year price target is just above Tuesday's all time high at $841.81.
As oversold as Apple is on its weekly chart, that's how overbought Google has become with a 12x3x3 weekly slow stochastic reading at 91.27, where readings above 80.00 are overbought. The five-week MMA is $783.72 with the 200-week SMA at $576.35. My quarterly value level is $660.40 with a weekly pivot at $809.61 and semiannual and monthly risky levels at $854.04 and $868.08.
Thursday I will profile 10 to 15 brand name stocks that were downgraded to hold from buy following monthly benchmark revisions to ValuEngine data. Many of the companies may surprise you.
With the Dow Jones Industrial Average ($INDU) at new all-time highs, a Dow Theory Buy Signal has been confirmed, but with strength in a market that's overvalued fundamentally and overbought technically, individual stocks will lose buy ratings on strength as they move from value investments to momentum trades.
At the time of publication the author had no position in any of the stocks mentioned.
More from TheStreet.com
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Serious issues like drought and the deterioration of the developed world spell opportunity for this industry leader.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.