NEW YORK ( TheStreet) -- The big-three tech-related names outran their 12-month projected gains in strong Black Friday trading, and two of the three were downgraded this morning to hold from buy according to www.ValuEngine.com.The ValuEngine valuation model calculates a stock's fair value, the price at which a stock should trade at based on its fundamental economic data as if the market were completely rational and efficient. This calculation considers many time-sensitive variables, such as a stock's EPS growth, analyst estimates and consensus, and the interest rate environment. If any of the variables change, fair value changes overnight. The ValuEngine forecast model, which determines a stock's rating, predicts what a stock's price will be at a specified future time period given current market conditions. The forecast model builds upon the output of the stock valuation model and combines this data with econometric and simulation techniques to output target prices for one, three, and six-month and one, two, and three-year time horizons. The forecast model uses distinct algorithms for each of the six forecast time horizons for every industry. It considers short-term price reversals, intermediate-term momentum continuation, and long-term price reversals. As with our stock valuation model, parameters are updated overnight. The one-year price target is used to set the stock ratings. To have a buy rating according to ValuEngine a stock must have a projected 12-month gain of 5% to 12%. A stock projected to gain 12% or more over the next 12 months is rated a strong buy. A hold rating is a projected loss or gain between negative 5% and 5%. A sell rating is a projected loss of 5% to 12%, and a strong sell is a projected loss of 12% or more.
Amazon.com ( AMZN) ($239.88 vs. $233.78 on Nov. 21) gained 2.6% between Tuesday's close and the close on Black Friday. This reduced the stock's projected 12-month gain to 4.67% and hence the downgrade to hold from buy according to ValuEngine. Amazon's fair value is $195.89 so the stock is 22.45% overvalued. The main reason for this overvaluation is Amazon's 12-month forward price-to-earnings ratio from Wall Street analysts at 140.35. The daily chart for Amazon is positive after the 200-day simple moving average at $220.83 held on Nov. 15 and Nov. 16. This week's value level is $221.87 with my annual pivot remains a magnet at $236.23 with the 50-day SMA at $243.15 and my quarterly risky level at $263.71.
Chart Courtesy of Thomson/Reuters
Google ( GOOG) ($667.97 vs. $669.97 on Nov. 12) moved sideways to down between Tuesday's close and the close on Black Friday, was up $2.10 from Wednesday's close. This was enough for the stock's projected 12-month gain to fall to 4.01% and hence the downgrade to hold from buy rating according to ValuEngine. Google's fair value is $623.97 so the stock is 7.05% overvalued. Google's 12-month forward P/E from Wall Street analysts is elevated at 18.17. The daily chart for Google is neutral needing a close above the 21-day SMA at $669.40 to shift to positive. The 200-day SMA at $639.78 held on Nov. 16. My weekly value level is $624.04 with my monthly risky level at $679.57 and quarterly risky level at $713.85.
Chart Courtesy of Thomson/Reuters
Apple ( AAPL) ($571.50 vs. $560.91 on Nov. 21) rallied 1.9% between Tuesday's close and the close on Black Friday. Apple maintained its buy rating according to ValuEngine with a projected 12-month gain of 5.07%. Apple is thus on the cusp of a potential downgrade to hold. Apple's fair value is $621.17 so the stock is 8% undervalued. Apple's 12-month forward P/E from Wall Street analysts is favorable at 10.85. The daily chart for Apple is positive with Friday's close above the 21-day SMA at $569.45. The 200-day SMA at $639.78 held on Nov. 16. This week's value level is $508.60 with my semiannual value level at $481.73, and the 200-day SMA at $597.82.
Chart Courtesy of Thomson/Reuters At the time of publication the author held no positions in any of the stocks mentioned. Follow @Suttmeier This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.