10 Tech Buys and 10 Sells for Year-End

'Tis the season for strong tech stocks to trade higher and for weak tech stocks to trade lower as fund managers chase performance and investors sell the poor performers to lock in tax losses. This gives the savvy long-term investor the chance to sell overvalued tech stocks on strength and buy undervalued tech stocks on weakness.

The sell candidates are the stocks that are at least 20% overvalued, while the buy candidates are at least 20% undervalued. Ideally, I like sell candidates to show weekly chart profiles that are overbought, and the buy candidates to have bottoming patterns. Note, however, that when you read today's 20 tech stock profiles, some of the sell candidates still have positive weekly charts and a few of the buys still have negative charts. Sell candidates also should have nearby risky levels, and buy candidates should have nearby value levels. These are guidelines to consider when using my three-pronged approach to investing (buy on weakness/sell on strength).

I've reviewed the major tech subsectors -- computer manufacturing, computer software, semiconductors, Internet and telecom -- for stocks that fit these parameters to help you plan your year-end moves.

But first, let's review my three-pronged approach to investing.

Fundamental Screens: I calculate a fair value for every stock, which is the price at which a stock can trade in a perfect world. Fair value is not a price target; fair value is based on a stock's past data and projections for the future, including the trailing 12-month EPS, the forward 12-month estimated EPS and the yield on the 30-year Treasury bond. How these data points are weighted is based on a historical analysis of the stock's price history along with 17 other variables that influence the calculation based on the stock's sector and industry group.

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Richard Suttmeier is president of Global Market Consultants, Ltd., chief market strategist for Joseph Stevens & Co., a full service brokerage firm located in Lower Manhattan, and the author of TheStreet.com Technology Report newsletter. At the time of publication, he had no positions in any of the securities mentioned in this column, but holdings can change at any time. Early in his career, Suttmeier became the first U.S. Treasury bond trader at Bache. He later began the government bond division at L. F. Rothschild. Suttmeier went on to form Global Market Consultants as an independent third-party research provider, producing reports covering the technicals of the U.S. capital markets. He also has been U.S. Treasury strategist for Smith Barney and chief financial strategist for William R. Hough. Suttmeier holds a bachelor's degree from the Georgia Institute of Technology and a master's degree from Polytechnic University. Under no circumstances does the information in this commentary represent a recommendation to buy or sell stocks. While he cannot provide investment advice or recommendations, he invites you to send your feedback -- click here to send him an email.