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Sell-Rated Stocks a Source of Funds

Amazon (AMZN) ($257.28) had a sell rating on March 6 and was thus a source of funds when it traded between my monthly pivot at $275.15 and my weekly risky level at $277.07.

Google (GOOG) ($814.71) had a hold rating on March 6 and when it spiked to a new all time high at $844.00 it was a partial source of funds testing the ValuEngine one-year price target at $841.81. Wall Street celebrated the record high with raised price targets, not a call for profit-taking.

On March 18, I wrote 12 Sell Downgrades Threaten Dow Transports and Con-Way (CNW), JB Hunt Transport (JBHT), Norfolk Southern (NSC) and Old Dominion Freight (ODFL) had sell ratings and were thus a source of funds.

This morning, US Airways (LCC) has been downgraded to sell and becomes a source of funds.

On March 19, I wrote Sell Downgrades Weaken Homebuilder Foundations, and seven of eight homebuilder stocks profiled in this post were sell-rated and thus a source of funds. On Wednesday, DR Horton (DHI) traded above its weekly risky level at $25.02, KB Home (KBH) could have been sold as a source of funds on strength to my weekly risky level at $21.69, and Lennar (LEN) traded above my monthly risky level at $42.27.

This morning, Toll Brothers (TOL) becomes a source of funds on a downgrade to sell from hold, and the stock tested its monthly risky level at $36.49 yesterday. Within the construction sector, every homebuilder now has a sell or strong-sell rating.

Other Notable Sell Rated Stocks That Are a Source of Funds:

Boeing (BA) ($85.37): My quarterly value level is $79.34 with a weekly pivot at $82.63 and annual risky level at $88.82

Ford Motor (F) ($13.36): My quarterly value level is $6.98 with a monthly pivot at $13.11 and semiannual risky level at $15.71.

General Motors (GM) ($29.10): My annual value level is $20.40 with a weekly pivot at $26.79 and monthly risky level at $30.59.

Let me reiterate that there is nothing wrong with profit-taking. It is much easier to book profits and raise cash on stock-specific strength. My suggested allocation to stocks is a maximum of 50% given overvalued valuations, overbought technicals and now the wave of downgrades.

I have no positions in the stocks mentioned today, and no other conflicts.

At the time of publication the author had no position in any of the stocks mentioned.

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