Cisco and Intel Are Buy-Rated Dow Stocks to Own

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.

Home Depot (HD) ($78.54) set a new all-time intra-day high at $82.27 on Nov. 19 and maintains its buy rating as the stock is just 3.1% overvalued. My semiannual value level is $74.17 with a monthly risky level at $85.35.

IBM (IBM) ($176.08) has been below its 200-day SMA since July 19 and traded to a 2013 low at $172.57 on Oct. 17. IBM maintains its buy rating and is 10.7% undervalued with a 12 month trailing P/E at 10.5. My annual value level is $171.70 with the 200-day SMA at $194.45 and quarterly risky level at $216.66. This stock is well above its 1999 bubble high and is trying to stay above its 200-week SMA at $174.48.

Intel ($24.26) traded down from $25.29 on Nov. 21 to $23.40 on Dec. 3 and was upgraded to buy from hold as the stock stayed above its 200-day SMA at $23.22. My annual value level is $19.60 with a monthly pivot at $25.46 and quarterly risky level at $26.26. This stock is not a bubble stock as it is well below its 2000 bubble high above $70.

Coca Cola (KO) ($39.83) has been trading back and forth around its 200-day SMA at $40.02 since Oct. 28 after rebounding from a second half 2013 low at $36.83 on Oct. 7. The stock still has a buy rating with a monthly pivot at $39.23 and quarterly risky level at 42.74.

McDonald's (MCD) ($95.43) fell below its 200-day SMA at $98.10 on Nov. 27 and maintains a buy rating. The 200-week SMA is $86.65 with a monthly pivot at $95.34 with semiannual and annual risky levels at $98.47 and $99.38.

3M Company (MMM) ($126.83) set a new all-time intra-day high at $134.16 on Nov. 29. The stock remains buy rated with a semiannual value level at $123.39 with a quarterly pivot at $128.27 and monthly risky level at $130.94.

Procter & Gamble (PG) ($82.69) set a new all-time intra-day high at $85.82 on Nov. 25 and maintains a buy rating. My monthly value level is $81.49 with a semiannual pivot at $81.86 and weekly risky level at $88.37.

AT&T (T) ($34.25) fell below its 200-day SMA at $35.63 on Nov. 20 and maintains a buy rating. The stock's second half 2013 low was $33.09 set on Oct. 8 with this month's value level at $33.84 and semiannual risky level at $38.14.

United Health (UNH) ($72.75) set its all-time intra-day high at $75.88 on Sept. 16, then traded as low as $66.72 on Oct. 28. After the stock rebounded to a secondary high at $74.99 on Nov. 26 it was downgraded to hold from buy. The 200-day SMA is $66.49 with a semiannual pivot at $73.01 and quarterly risky level at $74.70.

United Technologies (UTX) ($109.05) set its all-time intra-day high at $112.46 on Sept. 19 and currently is trading above its 50-day SMA at $107.63. The stock maintains a buy rating with a semiannual value level at $107.61 with a monthly risky level at $111.15.

Verizon (VZ) ($48.91) moved below its 200-day SMA at $49.55 on Dec. 4 and maintains a buy rating. My semiannual value level is $42.34 with a semiannual pivot at $49.86 and quarterly risky level at $53.08.

Wal-Mart (WMT) ($79.44) set a new all-time multi-year high at $81.37 on Dec. 4 and maintains a buy rating. The high was a test of my quarterly risky level at $80.09. My semiannual value level is $74.96 with a monthly pivot at $78.66 and weekly risky level at $83.35.

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 is the chief market strategist at to ValuEngine.com. He has been a professional in the U.S. Capital Markets since 1972, transferring his engineering skills to the trading and investment world.

Suttmeier has an engineering degree from Georgia Tech and a Master of Science degree from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. He became the first long bond trader for Bache in 1978, and formed the Government Bond Department at LF Rothschild in 1981, helping establish that firm as a primary dealer in 1986. This experience gives him the insights to be an expert on monetary policy, which he features in his newsletters, and market commentary.

Suttmeier's industry licenses include, Series 7 and Registered Principal (Series 24). He has been the Chief Market Strategist for ValuEngine.com since 2008 and often appears on financial TV.

Click here for details on Suttmeier's "Buy and Trade" investment strategy.

Richard Suttmeier can be reached at RSuttmeier@Gmail.com

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