No Anxiety for Tech, Biotech

Merrill Lynch quantitative strategist Savita Subramanian, on the other hand, published his list of 17 stocks that might make good candidates for shorting. Titled, "The Run is Done (RID) list," Subramanian lists stocks that significantly outperformed in 2006, but are "at risk of underperforming in early 2007."

All of the stocks on the list outperformed their relative sector indices significantly in 2006. They also outperformed the S&P 1500 and they have neutral or sell ratings from their fundamental industry analysts at Merrill Lynch.

These shares are now at risk of underperforming for two primary reasons, he writes. First, after holding onto the best-performing stocks through their year-end reports and reviews (a.k.a. "window dressing"), portfolio managers may now feel safe letting them go. Also, investors might unload these high-return stocks in January to avoid short-term capital gains taxes.

Subramanian's list includes DirectTV Group(DTV Quote), which returned 77% last year; General Motors(GM Quote), which was up 58% in 2006; Terex(TEX Quote), which returned 117%; Boston Properties(BXP Quote), which tacked on 51%, and; Deere(DE Quote), which added 40%.

On the heels of less-than-stellar retail sales reports for December, Birinyi Associates says investors shouldn't dismiss the retailers in the post-holiday season. The firm notes that retail stocks generally trail the overall market's performance in the period from Thanksgiving to year-end, as was the case in 2006, writes Birinyi analyst Paul Hickey.