The basic materials sector is 1.1% undervalued, but has an underweight rating with 68.9% of the 402 stocks in this sector rated sell or strong sell.
The business services sector is 22.4% overvalued with an equal-weight rating.
The construction sector is 17.6% overvalued with an underweight rating with 60.9% of the 161 stocks in this sector rated sell or strong sell.
The consumer discretionary sector is 23.5% overvalued with an equal-weight rating.
The consumer staples sector is 16.7% overvalued with an overweight rating with 50.9% of the 265 stocks in this sector rated buy.
The risk / reward for the stock market is not favorable in the fourth quarter, and today's monthly and quarterly closes will result in new monthly pivots / risky levels and new quarterly risky levels.
This week's value levels lag at 14,696 Dow Industrial Average, 1641.5 S&P 500, 3695 Nasdaq, 6318 Dow transports and 1034.93 Russell 2000.
The Nasdaq ended last week above my semiannual pivot at 3759 with the semiannual risky levels at 16,490 Dow Industrials, 1743.5 S&P 500, 7104 Dow transports and 1089.42 Russell 2000. The all time highs are 15,709.59 Dow Industrials set on Sept. 18, 1729.86 S&P 500 on Sept. 19, 6754.81 Dow transports on Sept. 20 and 1082.00 Russell 2000 on Wednesday. The Nasdaq set a multi-year high at 3798.76 on Sept. 20.
My annual value levels remain at 12,696 Dow Industrials, 1348.3 S&P 500, 2806 Nasdaq, 5469 Dow Transports, and 809.54 Russell 2000.
All eight stocks previewed today are overvalued with two overvalued by 25% and 60.6%. Two stocks have buy ratings with five rated hold and one rated sell. All have gains over the last 12 months with three having gains of 52.8% to 78.8%. All are trading above their 200-day simple moving averages, which reflects the risk of reversion to the mean.
Reading the Table
OV/UN Valued: 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 12 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 12 months. Stocks with a black number in the table are projected to move higher by that percentage over the next 12 months.
Value Level: 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: Price at which to enter a GTC limit order to sell on strength.
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.