NEW YORK ( TheStreet) -- We began the week with a ValuEngine Valuation Warning with more than 65% of all stocks overvalued, with the Dow Industrial Average above 14,000, and with the yield on the U.S Treasury 30-year bond approaching 3.25%. This negative fundamental backdrop did not include Apple (AAPL - Get Report), which has been undervalued for several weeks now.Even with a down market Monday, all major equity averages except the Nasdaq 100 Index were overbought on their weekly charts with 12x3x3 weekly stochastic readings between 83.29 for the Nasdaq and 92.31 for the Dow transports. The Nasdaq 100 has a stochastic reading rising at 77.76, which is still below the 80.00 overbought threshold. While the markets became overbought, the weekly stochastic reading for Apple was extremely oversold with a reading well below 20.00 at 12.89.
The anomaly of Apple, the proverbial market leader to the upside, is that this stock has become a market drag. This leads to my conclusion that this undervalued and oversold stock must blossom for the stock market rally to continue. I last covered Apple on Feb. 5 in