Allocate U.S. Holdings to 14 Top Dow Stocks

NEW YORK (TheStreet) -- The Dow Industrial Average contains 30 brand named companies, of which 14 are buy-rated according to ValuEngine. Today I profile the 12 buy-rated names that are not in the consumer staples sector. These, plus the two I profiled on Monday, are buy-and-trade candidates, and represent what I consider core holdings in allocating a maximum of 50% of investible funds in the U.S. stock market.

On March 18, in 12 Sell Downgrades Threaten Dow Transports, my suggested allocation to this sector was reduced to zero as a source of funds, as there were no buy-rated stocks in this sector.

On March 19, in Sell Downgrades Weaken Homebuilder Foundations, my suggested allocation to the homebuilders was also reduced to zero, as a source of funds. This strategy expanded to the entire construction sector on March 21, in Sell-Rated Stocks a Source Of Funds.

Today, www.ValuEngine.com shows that 63.7% of all stocks are overvalued, just below the 65.0% ValuEngine Valuation Warning threshold.

The six sectors represented by the 14 buy-rated Dow stocks are overvalued: computer & technology by 15.6%; consumer staples by 26.1%; medical by 11.5%; multi-sector conglomerates by 9.1%; retail-wholesale by 17.5%; and utilities by 13.0%.

Among today's 12 Dow stocks, nine are trading above their 200-day simple moving averages (SMA), while three are below, so the risk of a reversion to this mean remains evident.

Within the Dow P/E ratios are reasonable with the 12-month trailing P/E ratios between 10.2 and 21.4.

Reading the Table

OV / UN Valued: The stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine.

VE Rating: 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 twelve 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 twelve months. Stocks with a Black number in the Table are projected to move higher by that percentage over the next twelve months.

Value Level: The 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.

Pivot: A level between a value level and risky level that should be a magnet during the time frame noted.

Risky Level: is the price at which to enter a GTC Limit Order to sell on strength.

Cisco Systems ( CSCO) ($20.85) has an annual value level at $17.77, with a monthly pivot at $21.08 and semiannual risky level at $22.43. The weekly chart profile is negative given a close this week below the five-week modified moving average (MMA) at $21.00. The 200-week SMA is a support at $20.15.

General Electric ( GE) ($23.24) has an annual value level at $21.09, with a monthly pivot at $22.73 and weekly risky level at $24.14. The weekly chart profile is positive but overbought with the five-week MMA at $23.06.

Home Depot ( HD) ($69.47) set a multi-year high at $71.45 on March 8. My quarterly value level is $61.73 with a weekly pivot at $69.06 and a monthly risky level at $71.79. The weekly chart profile is positive but overbought with the five-week MMA at $68.31.

Intel ( INTC) ($21.15) has a semiannual value level at $19.80 with a weekly pivot at $21.38 and quarterly risky level at $24.88. The weekly chart profile shifts to negative on a close this week below the five-week MMA at $21.17 with the 200-week SMA at $21.91.

McDonalds ( MCD) ($98.24) has a semiannual value level at $96.26, with an annual pivot at $99.38 and weekly risky level at $100.18. The weekly chart profile is positive but overbought with the five-week MMA at $96.77.

3M ( MMM) ($105.17) set a multi-year high at $106.88 on March 15. My monthly value level is $100.67 with a weekly pivot at $108.23 and semiannual risky level at $111.34. The weekly chart profile is positive but overbought with the five-week MMA at $103.71.

Microsoft ( MSFT) ($28.16) has a monthly value level at $26.07 with an annual pivot at $28.57 and semiannual risky level at $34.15. The weekly chart profile is positive with the five-week MMA at $27.95 and the 200-week SMA at $27.38.

AT&T ( T) ($36.39) has a semiannual value level at $31.76 with a monthly pivot at $35.74 and weekly risky level at $37.98. The weekly chart profile is positive but overbought with the five-week MMA at $35.94.

UnitedHealth ( UNH) ($54.86) has a monthly value level at $49.84 with a semiannual pivot at $54.10 and semiannual risky level at $59.89. The weekly chart profile is neutral with the five-week MMA at $54.77.

United Technologies ( UTX) ($92.80) set a multi-year high at $94.00 March 20. My annual value level is $90.05 with a weekly pivot at $93.29 and semiannual risky level at $94.43. The weekly chart profile is positive but overbought with the five-week MMA at $91.09.

Verizon ( VZ) ($49.16) set a multi-year high at $49.44 on March 25. My quarterly value level is 45.88 with a weekly risky level at $50.53. The weekly chart profile is positive but overbought with the five-week MMA at $47.05.

Wal-Mart Stores ( WMT) ($74.85) has a quarterly value level at $70.08 with a weekly pivot at $74.89 and monthly risky level at $77.86. The weekly chart profile is positive with the five-week MMA at $72.42.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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