The second quarter of 2005 begins with my proprietary models showing the technology sector 18.4% undervalued, and that is remarkable in that the only other sector that is undervalued is health care, which appears 7.3% below value. Within my technology focus areas, computers stand at 13.5% undervalued, semiconductors at 25.5% undervalued and software 20.6% undervalued.

Among the computer stocks I currently focus on,

Hewlett-Packard

(HPQ) - Get Report

continues to have the best screens from my proprietary models, with

Apple Computer

(AAPL) - Get Report

showing the most downside risk.

Since March 1, when I wrote bearishly on Apple's outlook, its stock has fallen 7.1% and Hewlett-Packard has risen 5.5%.

Updating my screens on these two stocks, Apple is currently overvalued by 54.7%, with a weekly chart pattern that shifts to negative on a close this week below the five-week modified moving average at $40.80. A trade to that level would indicate risk to the chart support at $31. Independent industry sources tell me that sales of Apple's iPod are softening as inventory appears to be outpacing demand, and the lag of a screen on the iPod shuffle is disappointing consumers. The Mac Mini was going to take sales away from other PC manufacturers given the hype of the iPod, but that is not happening.

Hewlett-Packard, though, is undervalued by 31.6%, with a positive weekly chart profile at Friday's close above the five-week modified moving average at $20.55. The currently superior profile for HPQ should be monitored as investors assess the new CEO, Mark Hurd.

Semiconductor Values Stand In Place

When looking for leadership at the outset of the year, I focused on the Philadelphia Stock Exchange Semiconductor Index (SOX) in the first quarter, looking for leadership from chips, but the SOX could not sustain a trend above its 200-week moving average.

Intel

(INTC) - Get Report

and

Texas Instruments

(TXN) - Get Report

were my stocks of choice and their screens remain favorable today.

Intel is undervalued by 42.3%, with a negative weekly chart pattern. The stock's chart support is $21.90, with the five-week modified moving average and 200-week simple moving average at $23.36 and $24.67, respectively.

Texas Instruments also remains undervalued, 42.5%, and its weekly chart pattern is negative. Chart support is $20.70, with the five-week modified moving average and 200-week simple moving average at $25.17 and $24.71.

Oracle Still the Enterprise Software Story

When I shared independent analyst Rob Tholemeier's positive view of

Oracle

(ORCL) - Get Report

), my screens showed that BEA Systems

(BEAS)

, Oracle and

Siebel

(SEBL)

were more than 40% undervalued, with

Websense

(WBSN)

overvalued.

Today, BEA Systems remains undervalued, currently by 59.6%, and it has a negative weekly chart pattern. A weekly close above the five-week modified moving average at $8.19 is required to target the 200-week simple moving average at $11.75.

Oracle also stands undervalued by 30%, with a negative weekly chart profile. The stock needs a weekly close above the five-week modified moving average at $12.87 to shift the weekly chart pattern to positive. Weekly closes above the 200-week simple moving average at $12.40 offer a sign of stability.

Siebel Systems is undervalued by 60.4% and boasts a positive weekly chart pattern. A weekly close above the five-week modified moving average at $8.95 indicates potential to the 200-week simple moving average at $14.72.

Websense, my negative from March, is 20.8% overvalued, with a negative weekly chart pattern. A weekly close below the five-week modified moving average at $54.90 opens the stock up to risk to the 200-week simple moving average all the way down at $27.19.

Richard Suttmeier is president of Global Market Consultants, Ltd., and chief market strategist for Joseph Stevens & Co., a full service brokerage firm located in Lower Manhattan. At the time of publication, he had no positions in any of the securities mentioned in this column, but holdings can change at any time. Early in his career, Suttmeier became the first U.S. Treasury Bond Trader at Bache. He later began the government bond division at L. F. Rothschild. Suttmeier went on to form Global Market Consultants as an independent third-party research provider, producing reports covering the technicals of the U.S. capital markets. He also has been U.S. Treasury Strategist for Smith Barney and chief financial strategist for William R. Hough. Suttmeier holds a bachelor's degree from the Georgia Institute of Technology and a master's degree from Polytechnic University. Under no circumstances does the information in this commentary represent a recommendation to buy or sell stocks. While he cannot provide investment advice or recommendations, he invites you to send your feedback to

richard.suttmeier@thestreet.com.