This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Stock Ratings Key Market Top

NEW YORK (TheStreet) -- The most defensive sector in the stock market is utilities and the Dow Utility Average set a multi-year high on Thursday at 512.11, and is up 13.0% year to date. This is no surprise as 90% of all utility stocks are rated strong buy or buy, and includes 61.5% of all strong buy rated stocks.

When valuations and ratings set up this way at www.ValuEngine.com, it's a clear signal that investors need to become more defensive in their overall investment strategy.

You can trade utilities via the Utilities Select Sector SDPR (XLU) ($39.40). Keep in mind that XLU is overbought on both its daily and weekly charts and that the utility sector is 8.8% overvalued. My semiannual and monthly value levels are $36.48 and $35.88 with quarterly and annual risky levels at $40.27 and $40.52.


On the opposite side of the spectrum are the transportation and construction sectors.

The Dow Transportation Average was up 18.6% year to date at its March 19 high, and today it's up 13.2% year to date as sell rated stocks spread into this sector. We show that 77.4% of all stocks in this sector are rated sell or strong sell, which is a warning to book profits and raise cash.

You can trade transports via the iShares Dow Transports (IYT) ($106.86). IYT closed Thursday below its 50-day simple moving average (SMA) at $107.04 on a negative daily chart. The weekly chart shows overbought momentum, but IYT could end the week below its five-week modified moving average (MMA) at $107.64, which would be the first such close since the week of Nov. 17. My monthly value level is $105.59 with annual and semiannual pivots at $106.22 and $106.95 (both tested Thursday). My annual value level lags at $97.32.

The construction sector as measured by the PHLX Housing Sector Index (HGX) peaked at 198.06 on March 20, up 15.6% on the year at that time. Since then HGX is down 7.5% ending Thursday at $183.14, still up 6.9% year to date.


Sell rated stocks spread into the construction sector before HGX peaked on March 20. We show that 60% of all stocks in this sector are rated strong sell or sell, which is a warning to book profits and raise cash.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,039.49 +60.36 0.36%
S&P 500 1,992.37 +5.86 0.30%
NASDAQ 4,532.1040 +5.6220 0.12%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs