Tough Times Ahead for Big-Cap Tech

IBM (IBM Quote): Big Blue helped the Dow Jones Industrial Average reach its all-time high on Friday with a multiyear high of its own at $95.80, which is above my semiannual pivot at $94.55. I see the risk of a 20% share-price decline over the next three years.

Intel (INTC Quote): It reached $22.50 a month ago and has been a drag on the Philadelphia Stock Exchange Semiconductor index, or SOX, ever since. Intel is 14.6% undervalued, but with declining momentum, it is not likely to achieve its fair value. It's more likely to decline 20% over the next three years.

Microsoft (MSFT Quote): Like IBM, Microsoft helped the Dow to its all-time high on Friday. Its high at $30.23 is just 3 cents above a ceiling set between April 2002 and November 2004. Microsoft has a downside risk of 30% over the next three years.

Motorola (MOT Quote): This stock illustrates just how fast a big-cap tech stock can decline by more than 20%. It peaked at $26.30 on Oct. 13 and traded as low as $20.53, down 21.9% in just two months. Motorola also illustrates how its annual pivots influence a stock, once they are tested. Its annual pivots are $20.96 and $23.10 -- powerful magnets for all of 2006. It still has another 15% of downside risk over the next three years.

Nokia (NOK Quote): This name saw a 22.3% correction in 2006, from its April 21 high of $23.47 to its July 17 low of $18.23. Nokia has 20% of downside risk over the next three years.

Oracle (ORCL Quote): It is down 10.5% since its Nov. 22 high of $19.75, where an earnings beat appears to be built in. The key support to hold after today's post-close earnings report is my quarterly value level at $17.09. Even if there's a positive pop to my monthly risky level at $19.25, Oracle shares are projected to decline 25% over the next three years.

Qualcomm (QCOM Quote): This is the most undervalued of the big-cap names, but it's unlikely to achieve its fair value at $50.06. The stock has been trading between my semiannual value level at $35.41, and my quarterly risky level at $41.80. I see 20% of downside risk over the next three years.

SAP (SAP Quote): It's above my semiannual pivot at $49.58, with a quarterly risky level at $54.79. The weekly chart profile stays positive with a weekly close above the five-week modified moving average at $49.53.

Taiwan Semi (TSM Quote): This stock should trade between my monthly value level at $9.48 and my quarterly risky level at $11.23, with 15% of downside risk over the next three years.

Key Levels of the Biggest Tech Stocks Here's a look at those with market caps above $50 billion
Big Cap Tech	15-Dec Price	Rating	(-UV) / OV By	Fair Value	MOM	5-Week MMA	Value Levels	Pivots	Risky Levels	Downside Risks
Apple Comp (AAPL)	$87.72	HOLD	5.10%	$83.47	OB	$85.06	84.29 Q		93.98 Q	40%
Cisco Systems (CSCO)	$27.56	HOLD	27.50%	$21.62	OB	$27.56	22.99 M	24.36 S	40.48 A	30%
Dell Inc. (DELL)	$26.53	HOLD	-16.00%	$31.60	OB	$25.56	19.56 M		27.53 Q	15%
Google (GOOG)	$480.30	HOLD	-5.70%	$509.38	OB	$473.02	459.36 M		none	30%
Hewlett Packard (HPQ)	$39.94	HOLD	4.70%	$38.15	OB	$39.12	38.07 M	39.52 Q	none	25%
IBM (IBM)	$95.30	HOLD	8.00%	$88.28	OB	$91.65	85.43 M	94.55 S	none	20%
Intel Corp (INTC)	$20.96	HOLD	-14.60%	$24.54	DM	$20.90	20.38 M		24.79 Q	20%
Microsoft (MSFT)	$30.19	HOLD	8.70%	$27.77	OB	$29.08	24.93 M		46.09 A	30%
Motorola (MOT)	$20.71	HOLD	-8.60%	$22.65	DM	$22.08	18.45 S	20.96 A	23.10 A	15%
Nokia (NOK)	$20.34	HOLD	2.70%	$19.80	RM	$20.11	19.87 S		22.57 Q	20%
Oracle (ORCL)	$17.68	HOLD	19.10%	$14.84	DM	$18.25	17.09 Q		19.25 M	25%
Qualcomm (QCOM)	$39.50	HOLD	-21.90%	$50.06	RM	$37.91	35.41 S		41.80 Q	20%
SAP AG (SAP)	$51.63	HOLD	-2.10%	$52.72	DM	$50.97	47.18 M	49.58 S	54.79 Q	25%
Taiwan Semi (TSM)	$10.74	HOLD	18.70%	$9.05	RM	$10.28	9.48 M		11.23 Q	15%
Key: MOM, momentum; OB, overbought; DM, declining momentum; RM, rising momentum; OS, oversold; F, flat; M, monthly; Q, quarterly; S, semiannual; A, annual. A value level is a price at which my models project that buyers will emerge; a risky level is a price at which investors are likely to reduce holdings, according to my models. A pivot is a value or risky level that has been breached in its particular time horizon; the stock will likely trade around this pivot. Source: RightSide.com