Energy and utilities have been considered safe havens in recent years, but as I wrote Tuesday, these sectors have deteriorated and should be sold on strength by long-term investors. It makes sense to consider rotating some assets into the tech sector. My models project that technology stocks could lead a turnaround; at the least, they should hold up relatively well in a weak market. According to my models, the tech sector is the cheapest in the market at 13.6% undervalued, with consumer durables in second place at 8.4% undervalued. Energy is 6.4% overvalued and public utilities 5.6% overvalued. If the stock indices are bottoming, the chart patterns favor the tech-heavy Nasdaq. The Nasdaq Composite's daily chart will remain positive as long as daily closes stay above the 200-day simple moving average of 2073. A close Friday above the five-week modified moving average of 2112 would shift the weekly chart profile to neutral. Watch out, however, if the monthly chart profile shifts to negative with a close Monday below the five-month modified moving average of 2091. Investors should keep my guidelines in mind when choosing tech stocks. The ideal stock has a cheap valuation, a positive weekly chart profile and a value level at which to add to positions on weakness. Look for a stock that's at least 20% undervalued according to my model, with a positive weekly chart profile (or an indication the chart profile is improving) and a monthly or longer-term value level at which to buy. The reaction to Amazon's ( AMZN) earnings Tuesday was clearly negative. Analysts gave the report the retail spin. If you consider Amazon to be just an online retailer, shares were way overvalued. Amazon was 26.4% overvalued, with fair value at $36.90 before reporting earnings. It set a 52-week high of $47.00 Tuesday on a failed test of my semiannual pivot at $46.85, which proved to be a risky area, as shares were trading at $46.17 at the close pre-earnings. A weekly close below the five-week MMA at $43.64 indicates risk to my quarterly value level of $38.99. Clearly this profile indicated that long-term investors should have booked profits at $46.85 before earnings. Here's how to evaluate some of the stocks reporting after the close Wednesday. Avid Tech ( AVID) is expected to report EPS of 46 cents. The software company is 30% undervalued, with fair value at $56.54. Its weekly chart profile is neutral, and a close this week above the five-week modified moving average of $41.19 will shift the weekly chart profile to positive.