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This column was originally published on RealMoney on Dec. 18 at 2:03 p.m. EST. It's being republished as a bonus for readers. For more information about subscribing to RealMoney, please click here.

It could be a year of limited upside ahead for big-cap tech.

According to my model, tech stocks with market caps of more than $50 billion could decline 15% to 40% over the next three years. Overvalued stocks should decline to their fair values, and those that are now undervalued probably won't get to their fair values. As the table below will show, ValuEngine rates them all a hold.

For those readers unfamiliar with my screening methods, I like stocks that are rated strong buy or buy according to ValuEngine, with strong buys at least 10% undervalued and buys at least 20% undervalued. This usually occurs when a stock is trading lower toward a value level from my model. When stocks rise and become fundamentally overvalued and technically overbought, I look for risky levels at which to book profits on strength, or suggest protective strategies such as sell-stops, given a weekly close below the stock's five-week modified moving average.

So let's take a look at some individual names in big-cap tech.



: Despite the holiday sales hype surrounding iPods and iMacs, this stock can't climb to my quarterly risky level at $93.98. It declined 40% in the first seven months of 2006, and a similar decline looks likely over the next three years.



: This stock is trying to return to its January 2004 high of $29.39. If it does, it will be on pure technical momentum. Even with this strength, Cisco's downside risk is 30% over the next three years.



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: It tested my quarterly risky level at the end of November, and it should have a tough time reaching its fair value at $31.60. A laggard in 2006, Dell's downside is 15% over the next three years.



: This stock achieved its fair value when it tested $513 on Nov. 22. My model shows risk of a 30% decline over the next three years.



: A month ago, the stock tested $40.85 and has been moving sideways to down since then. The downside is 25% over the next three years.



: Big Blue helped the

Dow Jones Industrial Average

reach its all-time high on Friday with a multiyear high of its own at $95.80, which is above my semiannual pivot at $94.55. I see the risk of a 20% share-price decline over the next three years.



: It reached $22.50 a month ago and has been a drag on the Philadelphia Stock Exchange Semiconductor index, or SOX, ever since. Intel is 14.6% undervalued, but with declining momentum, it is not likely to achieve its fair value. It's more likely to decline 20% over the next three years.



: Like IBM, Microsoft helped the Dow to its all-time high on Friday. Its high at $30.23 is just 3 cents above a ceiling set between April 2002 and November 2004. Microsoft has a downside risk of 30% over the next three years.



: This stock illustrates just how fast a big-cap tech stock can decline by more than 20%. It peaked at $26.30 on Oct. 13 and traded as low as $20.53, down 21.9% in just two months. Motorola also illustrates how its annual pivots influence a stock, once they are tested. Its annual pivots are $20.96 and $23.10 -- powerful magnets for all of 2006. It still has another 15% of downside risk over the next three years.



: This name saw a 22.3% correction in 2006, from its April 21 high of $23.47 to its July 17 low of $18.23. Nokia has 20% of downside risk over the next three years.



: It is down 10.5% since its Nov. 22 high of $19.75, where an earnings beat appears to be built in. The key support to hold after today's post-close earnings report is my quarterly value level at $17.09. Even if there's a positive pop to my monthly risky level at $19.25, Oracle shares are projected to decline 25% over the next three years.



: This is the most undervalued of the big-cap names, but it's unlikely to achieve its fair value at $50.06. The stock has been trading between my semiannual value level at $35.41, and my quarterly risky level at $41.80. I see 20% of downside risk over the next three years.



: It's above my semiannual pivot at $49.58, with a quarterly risky level at $54.79. The weekly chart profile stays positive with a weekly close above the five-week modified moving average at $49.53.

Taiwan Semi


: This stock should trade between my monthly value level at $9.48 and my quarterly risky level at $11.23, with 15% of downside risk over the next three years.

At time of publication, Suttmeier had no positions in any of the stocks mentioned in this column, although positions may change at any time.

Richard Suttmeier is the chief market strategist for, where he writes the Small Stocks and Sector Report. Early in his career, he became the first long bond trader for Bache and later began the government bond department at LF Rothschild. Suttmeier went on to form Global Market Consultants as an independent third-party research provider, producing reports covering the U.S. capital markets. He has also been the 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. He appreciates your feedback;

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