At www.ValuEngine.com we show that 58.6% of all stocks are undervalued with 41.4% overvalued. While this is a better mix than a week ago, eleven of 16 sectors are overvalued.
The five most overvalued sectors are medical by 13.9%, construction by 12.5%, retail-wholesale by 11.3%, finance by 10.9%, consumer staples by 10.8%, and utilities by 10.3%.
According to Thomson / Reuters earnings season began with only 59% of the S&P 500 beating earnings estimates. If this trend continues third-quarter earnings would be the worst quarter by this statistic since fourth-quarter 2008.
Earnings Reports for Tuesday:CSX Corp (CSX) ($21.31): Has a buy rating according to ValuEngine with a reasonable price-to-earnings ratio. CSX is below its 200-day SMA at $21.98. The stock has traded in a 2012 range between $20 and $23.50. The weekly chart is negative with the 200-week SMA at $18.67. Investors and traders should employ a "buy-and-trade" strategy between the value level and risky level. Goldman Sachs (GS) ($120.20): Has a hold rating according to ValuEngine with a reasonable P/E and is above its 200-day SMA at $107.91. The stock set its 2012 high at $128.72 on March 27 and set a second half 2012 low at $90.43 on June 26. The weekly chart profile is positive but overbought with the 200-week SMA at $134.34. Investors and traders should employ a "buy-and-trade" strategy between the value level and risky level. IBM Corp (IBM) ($207.80): Has a buy rating according to ValuEngine with a reasonable P/E. The stock is above its 200-day SMA at $197.91. IBM set an all time high at $211.79 on Oct. 5. The weekly chart profile is positive but overbought with the 200-week SMA at $149.12. Investors and traders should book profits on strength to my monthly pivot at $208.88 and then employ a "buy-and-trade" strategy between the value level and risky level.
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