NEW YORK ( TheStreet) --Since May I have been suggesting investors book profits on stock market strength to raise cash to at least 50% of assets that they would normally have invested in stocks.
A portion of allocations to stocks should be buy rated components of the Dow Industrial Average including; Cisco Systems ( CSCO) and Intel ( INTC) have recently been upgraded to buy from hold, while General Electric ( GE) and United Health ( UNH) have recently been downgraded to hold from buy, according to www.ValuEngine.com.
Before I provide my "buy-and-trade" parameters among the buy-rated Dow components, it is time to book profits on Boeing (BA) ($132.73), which was recently downgraded to sell from hold. The aerospace and defense giant spiked to an all-time intra-day high at $142 on Nov. 18, prompting the downgrade. My quarterly value level is $115.10 with my monthly risky level at $140.46.
Cisco Systems ($20.91) reported disappointing earnings on Nov. 13 and the stock fell from $24 to $20.77 on Nov. 14 and on this weakness was upgraded to buy from hold. Cisco is one of the 16% of all stocks that are undervalued, as the stock is undervalued by 1.6%. The stock has a 12-month trailing P/E ratio of just 11.0. My annual value level is $17.77 with a semiannual pivot at $22.39 and annual risky level at $22.76, and its 200-day SMA at $23.07. This stock is not a bubble stock as it is well below its 2000 high above $75.
General Electric ($26.45) set a multi-year intra-day high at $27.50 on Nov. 18 and was subsequently downgraded to hold from buy. The stock is 30.1% overvalued with a monthly value level at $25.69, a semiannual pivot at $26.68 and quarterly risky level at $28.47.