Tesla Led 8 Momentum Stocks Higher in 2013

NEW YORK (TheStreet) -- The usual characteristics of momentum stocks include banking huge gains over the last 12 months, being significantly overvalued and having elevated price-to-earnings ratios. During a momentum phase, these stocks will typically have positive but overbought weekly chart profiles, with weekly closes above their five-week modified moving averages. At times these stocks can be out of favor and have significant downside corrections until momentum characteristics return.

As I explained on New Year's Eve, Apple (AAPL) shifted from being a momentum stock in 2012 to a value stock on weakness into April 2013. It then returned to momentum status in the second half of 2013.

Despite showing recent downside volatility, Tesla Motors (TSLA) and Netflix (NFLX) were the best performers in 2013, with gains of 344.1% and 297.8%, respectively.

As 2014 begins, there appears to be some profit-taking among the 8 momentum stocks I have been following.

Here are my buy-and-trade parameters for these stocks.

Apple ($553.13) ended 2013 at $561.02 with a hold rating, overvalued by 18.2% and with a gain of 5.4% in 2013 and a P/E ratio of 14.1. The stock is below its 21-day simple moving average (SMA) at $559.74 with its 50-day and 200-day SMAs at $539.90 and $474.36. Apple has a positive but overbought weekly chart profile, maintaining momentum characteristics. The stock is above its five-week modified moving average (MMA) at $543.23 and its 200-week SMA at $427.32. My new annual value level is $517.05, with a monthly pivot at $549.13 and an annual risky level at $586.06. Compare this to the recent high of $575.14, set on Dec. 6. My new semiannual risky levels are at $657.40 and $666.94.

Amazon.com (AMZN) ($397.97) ended 2013 at $398.79 with a hold rating, overvalued by 79.8% and with a gain of 59% in 2013 and a P/E ratio of 650.2. The stock set an all-time intraday high at $405.63 on Dec. 27 and is above its 21-day, 50-day and 200-day SMAs at $391.77, $374.34 and $306.79. Amazon has a positive but overbought weekly chart profile, maintaining momentum characteristics above its five-week MMA at $382.47 and its 200-week SMA at $219.17. My semiannual and annual values are $359.11, $351.24 and $334.95, with a quarterly pivot at $402.56 and monthly risky level at $412.18.

Chipotle (CMG) ($523.43) ended 2013 at $532.78 with a buy rating, overvalued by 35.1% and with a gain of 79.7% in 2013 and a P/E ratio at 52.5. The stock set an all-time intraday high at $550.26 on Nov. 18 and has moved sideways to down. It ended Thursday four cents below its 21-day SMA at $523.47, and below its 50-day SMA at $528.25, and well above its 200-day SMA at $420.70. Chipotle has a positive but overbought weekly chart profile, maintaining momentum characteristics above its five-week MMA at $519.99 and its 200-week SMA at $307.93. My quarterly value level is $461.71 with its semiannual and monthly pivots at $510.69 and $545.92 and semiannual risky level at $601.33.

Google (GOOG) ($1113.12) ended 2013 at $1120.71 with a hold rating, overvalued by 48.3%, with a gain of 58.4% in 2013 and a P/E ratio at 30.8. The stock set an all-time intraday high at $1121.00 on Dec. 31 and is above its 21-day, 50-day and 200-day SMAs at $1087.14, $1053.86 and $914.43. Google has a positive but overbought weekly chart profile, maintaining momentum characteristics above its five-week MMA at $1066.79 and its 200-week SMA at $664.84. My annual value levels are $1043.30 and $978.09 with a monthly pivot at $1107.37 and no risky levels. Google has been publicly traded for more than nine years, so this is the first year that the stock has annual levels from my proprietary analytics.

LinkedIn (LNKD) ($207.64) ended 2013 at $216.83 with a hold rating, a gain of 88.8% in 2013, with a P/E ratio at 565.6. The stock set an all-time intraday high at $257.56 back on Sept. 11. It is below its 21-day and 50-day SMAs at $222.86 and $224.11, and just below its 200-day SMA at $208.88. LinkedIn has lost its momentum status, with a negative weekly chart profile with declining momentum and below its five-week MMA at $221.43. My monthly and quarterly risky levels are $233.93 and $265.34. LinkedIn became publicly traded in May 2011, and thus does not have the longevity to have semiannual or annual levels from my proprietary analytics.

Netflix ($362.82) ended 2013 at $368.17 with a buy rating, overvalued by 21.8%, a gain of 297.6% in 2013 and a P/E ratio of 204.9. The stock set an all-time intraday high at $389.16 on Oct. 22. It is below its 21-day SMA at $368.00, and above its 50-day and 200-day SMAs at $350.79 and $271.31. After dipping to $309.20 on Oct. 29 the stock traded up to $383.96 on Christmas Eve. The weekly chart shows momentum characteristics, with a positive weekly chart profile above its five-week MMA at $356.36 and its 200-week SMA at $165.60. My semiannual, quarterly and annual value levels are $328.21, $325.48 and $242.14 with a monthly risky level at $383.83.

Priceline.com (PCLN) ($1145.44) ended 2013 at $1162.40 with a buy rating, overvalued by 28.1%, a gain of 87.4% in 2013 and a P/E ratio of 30.3. The stock set its all-time intraday high at $1198.75 on Nov. 29. It is below its 21-day SMA at $1176.14 and above its 50-day and 200-day SMAs at $1136.34 and $929.54. The weekly chart is positive but overbought, with the stock just above its five-week MMA at $1145.17 with its 200-week SMA at $589.43. A close today below $1145.17 would be a warning that the stock was losing its momentum characteristics. Semiannual, quarterly and annual value levels are $1113.17, $1010.25 and $925.01 with quarterly and monthly risky levels at $1192.75 and $1309.95.

Tesla ($150.10) ended 2013 at $150.43 with a hold rating, overvalued by 21.8%, and a gain of 344.1% in 2013, after trading to an all-time intraday high as $194.50 on Sept. 30. After declining to $116.10 on Nov. 26, Tesla then returned to momentum status in mid-December, with a high at $158.00. The stock is above its 21-day, 50-day and 200-day SMAs at $146.04, $145.23 and $122.64. The weekly chart is positive with the stock above its five-week MMA at $146.71. My quarterly value level is $142.81 with a monthly risky level at $232.64. Tesla became a publicly traded company in July 2010, and thus does not have enough price history to calculate semiannual and annual levels from my proprietary analytics.

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 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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