NEW YORK (TheStreet) -- Among the waves of stocks that report quarterly results next week, the nine I am profiling today are rated sell according to ValuEngine. Investors should consider booking profits on these stocks pre-earnings.
The stock market has clearly become a momentum game fueled by the notion that shares will continue to move higher as long as
Chief Bernanke continues QE3 and QE4. In a momentum market stock specific fundamentals tend to be ignored. Buying weakness has been the chosen strategy even following an earnings miss or weaker than expected guidance. I guess the bet is that QE3 and QE4 will cure the ills of even the sell rated companies.
I say that buyers should be beware as 75.3% of all stocks are overvalued, 42.2% by 20% or more including four on today's list. Eight of nine stocks are overvalued. All have sell ratings and all are trading higher than they did 12 months ago. Four have gained more than 58.9% with one up by more than 250%. All are projected to be lower 12 months ago. Seven of nine are above their 200-day simple moving averages.
My suggested allocation to the stock market is to have a maximum of 50% of your stock investment dollars in the market. If you have not taken gains in this environment, and own any of the stocks in today's list consider reducing your positions before these companies report earnings between July 23 and July 25.
Reading the Table
Stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine.
A "1-engine" rating is a strong sell, a "2-engine" rating is a sell, a "3-engine" rating is a hold, a "4-engine" rating is a buy and a "5-engine" rating is a strong buy.
Last 12-Month Return (%):
Stocks with a red number declined by that percentage over the last 12 months. Stocks with a black number increased by that percentage.
Forecast 1-Year Return:
Stocks with a red number are projected to decline by that percentage over the next 12 months. Stocks with a black number in the table are projected to move higher by that percentage over the next 12 months.
Price at which to enter a GTC limit order to buy on weakness. The letters mean; W-weekly, M-monthly, Q-quarterly, S-semiannual and A-annual.
A level between a value level and risky level that should be a magnet during the time frame noted.
Price at which to enter a GTC limit order to sell on strength.
($54.63) set a multi-year high at $57.25 on May 31 and weakness since then has stayed above $52.00. My weekly value level is $52.22 with my monthly pivot at $55.02 and semiannual risky level at $61.73.
($17.12) set a multi-year high at $17.29 on July 15 after being as low as $14.30 on June 24. My weekly value level is $16.69 with a semiannual risky level at $19.46.
($53.05) set a multi-year high at $59.97 back on Jan. 28. The stock has been trading back and forth around its 200-day SMA since May 29 with a low of $50.39 on June 26. My annual value level is $50.52 with a semiannual pivot at $51.52 and a quarterly risky level at $55.02.
($75.63) set a multi-year high at $81.00 on May 21 as the transportation average set its all time high. The stock traded as low as $70.27 on June 24 staying above its 200-day SMA. My weekly value level is $70.01 with a pivot at $75.90 and a semiannual risky level at $77.40. The annual pivot has been a magnet since the end of March.
($44.30) set a multi-year high at $44.73 on July 11. My monthly value level is $42.86 with a weekly risky level at $44.96.
($61.37) set a multi-year high at $64.68 on May 21 and traded as low as $58.36 on June 24. My annual value level is $59.74 with a weekly pivot at $60.52 and monthly risky level at $68.75.
($127.26) set a multi-year high at $133.25 on July 15. This is one of the most speculative stocks in the market today. Tesla is 111% overvalued without a P/E ratio. The daily chart has gone parabolic like the stocks in the March 2000 tech bubble. My monthly value level is $92.84 with a weekly pivot at $127.16, which was tested at Monday's low.
United Parcel Service
($85.48) set a multi-year high at $91.78 on July 11, and then issued an earnings warning and lower guidance. The high was a test of my monthly risky level at $91.06, where investors could have booked solid gains. This week's value level is $83.90.
Read: How Visualization Can Make You Better With Money
($25.81) set its multi-year high at $30.97 back on Feb. 13. The stock traded to a 2013 low at $21.35 on June 24. The building materials company has a semiannual value level at $25.64 with a monthly pivot at $26.27 and monthly risky level at $31.83.
At the time of publication the author held no positions in any of the stocks mentioned.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Richard Suttmeier has an engineering degree from Georgia Tech and a master of science from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. In 1981 he formed the Government Bond Department at LF Rothschild and helped establish that firm as a primary dealer in 1986. Richard began writing market research in 1984 and held positions as market strategist at firms such as Smith Barney, William R Hough, Joseph Stevens, and Rightside Advisors. He joined
in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs
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