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Buy Rated Semiconductors Lag the SOX

Stocks in this article: ^SOX ADI ALTR AMAT AMD CREE KLAC LRCX LSI MXIM NVDA ONNN SNDK TER TSM XLNX

NEW YORK (TheStreet) - The PHLX Semiconductor Index has been a stock market leader setting a multi-year intra-day high at 518.97 on Dec. 9 tracking the tech-heavy Nasdaq higher. Could it be that demand for semiconductors is on the rise despite a decline in the shipments in personal computers? Since almost every device manufactured contains computer chips strength in semiconductor stocks can be considered a leading indicator for a stronger than expected economy. In the case of the stocks in the SOX is it also a story where a rising tide of market strength does not lift all boats. Among the 15 buy rated stocks of the 30 in the SOX five are trading below their 200-day Simple moving averages including Altera (ALTR - Get Report), Cree (CREE - Get Report), Maxim Integrated (MXIM) and Taiwan Semi (TSM).

The SOX has a positive but overbought weekly chart profile with its five-week modified moving average at 506.67 and a 12x3x3 weekly slow stochastic reading of 92.27, well above the 80.00 reading that identifies an overbought condition. Semiconductors are also in the computer and technology sector which is 30.2% overvalued but with an overweight sector weighting as 51.7% of the 1140 companies in the sector are rated buy or strong buy.

Among the 15 stocks in today's post, two are undervalued by 3.7% and 31.6%. Among the overvalued names nine are overvalued by 20.8% to 43.9%. Two stocks in today's post have losses of 2.1% and 5.1% over the last 12 months, while eight of the remaining stocks are up between 24.5% and 73.6% over the last 12 months. The reversion to the mean is mixed as five are below their 200-day SMAs while 10 are above.

Analog Devices (ADI) ($48.91) is 38.8% overvalued and has a gain of 18.1% over the last 12 months and is above its 200-day SMA at $46.84. The stock traded as high as $50.79 on Nov. 15 and as low as $46.12 on Nov. 27. My monthly value level is $47.61 with semiannual and quarterly risky levels at $51.19, $52.45 and $53.36.

Altera ($31.41) is 19.3% overvalued and has a loss of 2.1% over the last 12 months and is below its 200-day SMA at $34.32 with its recent low at $30.99 set on Nov. 19. My annual value level is $27.26 with monthly and annual pivots at $32.14 and $32.26 and a quarterly risky level at $40.01.

Applied Materials (AMAT) ($16.83) is 33.5% overvalued and has a gain of 52.3% over the last 12 months and is above its 200-day SMA at $15.61 but below its 50-day SMA at $17.51. My semiannual value levels are $14.88 and $14.87 with a quarterly pivot at $16.46 and monthly risky level at $18.95.

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