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Continue to Book Profits in Consumer Discretionary Stocks

Home Depot (HD) ($58.86 vs. 52.82 on Sept. 14) set an all-time high at $59.71 on Sept. 14. HD is rated a strong buy, has an elevated P/E ratio and is well above its 200-day SMA at $49.36. Employ a "buy and trade" strategy between the value level and risky level.

News Corp. (NWSA) ($24.48 vs. $23.27 on Aug. 14) set a multiyear high at $24.80 on Sept. 14. NWSA has recently been downgraded to buy from strong buy, has so-so P/E ratio and is well above its 200-day SMA at $20.30. Employ a "buy and trade" strategy between the value level and risky level.

Target (TGT) ($64.26 vs. $62.51 on Aug. 14) set a multiyear high at $65.10 on Sept. 13. TGT is rated a buy, has a reasonable P/E ratio and is well above its 200-day SMA at $57.06. Employ a "buy and trade" strategy between the value level and risky level.

TJX Companies (TJX) ($45.34 vs. $44.24 on Aug. 14) set an all-time high at $46.67 on Aug. 29. TJX is rated a buy, has an elevated P/E ratio and is well above its 200-day SMA at $39.61. Employ a "buy and trade" strategy between the value level and risky level.

Time Warner Cable (TWC) ($92.56 vs. $89.75 on Aug. 14) set a multiyear high at $93.49 on Sept. 14. TWC is rated a buy, has a so-so P/E ratio and is well above its 200-day SMA at $78.27. Employ a "buy and trade" strategy between the value level and risky level.

Time Warner (TWX) ($44.87 vs. $42.67 on Aug. 14) set a multiyear high at $45.07 on Sept. 14. TWX is rated a buy, has a reasonable P/E ratio and is well above its 200-day SMA at $37.60. Employ a "buy and trade" strategy between the value level and risky level.

Eight of the stocks profiled today are overvalued fundamentally, with DTV and TWX trading just below their fair-value prices. All 10 have overbought weekly chart profiles. All 10 have traded higher by 8.1% (AMZN) to 74.4% (HD) over the past 12 months. They have P/E ratios between 13.2 (DTV) and 390.2 (AMZN). In my judgment, when these stocks turn lower the risk is to the 200-day simple moving averages.

At the time of publication, Suttmeier held no positions in securities mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Richard Suttmeier has an engineering degree from Georgia Tech and a master of science from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. In 1981 he formed the Government Bond Department at LF Rothschild and helped establish that firm as a primary dealer in 1986. Richard began writing market research in 1984 and held positions as market strategist at firms such as Smith Barney, William R Hough, Joseph Stevens, and Rightside Advisors. He joined www.ValuEngine.com in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs a "buy and trade" investment strategy and can be reached at RSuttmeier@Gmail.com.
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SYM TRADE IT LAST %CHG
XLY $76.14 0.11%
AMZN $391.18 0.43%
CMCSA $58.84 0.63%
DIS $107.68 -0.50%
NWS $15.35 -0.84%

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S&P 500 2,097.29 -3.11 -0.15%
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