NEW YORK (TheStreet) - High-priced momentum stocks have been leading the Nasdaq Composite higher, while the Dow Industrial Average, S&P 500 and Dow Transports have lagged.
Since its May high, the DJIA is 2.3% lower, even after setting additional all-time highs, the latest of which was 15,709.59 on Sept. 18.
The S&P 500 is 0.5% above its May high with its Sept. 19 all-time high at 1729.86. The Dow Transportation Average is 1.6% above its May high with its Sept. 20 all-time high at 6754.81.
Meanwhile, the Nasdaq set a multiyear high at 3817.98 yesterday vs. this month's risky level at 3830 and quarterly risky level at 4025. [Read: FedEx's Stock Has Limited Upside] The Russell 2000 set an all-time high at 1087.78 yesterday vs. its annual, monthly and quarterly risky levels at 1089.42, 1092.46 and 1163.21. It's not surprising that the six momentum stocks -- or stocks that trade higher on strong technical factors, often ignoring fundamentals -- are Nasdaq components. At the time of my last post covering momentum stocks on Sept. 12, Apple (AAPL) ($487.96) had peaked at my annual pivot at $510.64 on Aug. 19 and appeared to be vulnerable to return to my annual value level at $421.05. This scenario was enhanced by a break below the 200-day simple moving average at $461.49 on Sept. 16 with a day's low of $447.22. [Read: Discovering Tractor Supply] On Sept. 16, I noted that Apple was upgraded to buy from hold according to www.ValueEngine.com, and I reported that the 50-day SMA had crossed above the 200-day SMA, which some technicians call a "golden cross." On Sept. 18, the stock moved above its 200-day at $460.22, and then on Sept. 19, moved above its 50-day at $468.26. The high for this move has been $496.91 on Sept. 23 on the hype of sales of the two new iPhones. Apple still has a buy rating and is just 3.6% overvalued with a one-year price target at $518.18 vs. the annual pivot at $510.64 and the Aug. 19 high at $513.74. [Read: How to Sell a New Idea to Your Boss] The stock is trading above its 21-day, 50-day and 200-day SMAs at $480.55, $477.02 and $457.4, which is a positive. Apple is also above its five-week modified moving average at $473.11. This week's risky level is $502.14 with my annual pivot at $510.64 and semiannual risky levels at $620.84 and $621.46.
Amazon.com (AMZN) ($320.95) set an all-time high at $321 on Oct. 1. The stock continues to have a hold rating and is 19.3% overvalued with a one-year price target at $317.67.
Amazon is above its 21-day, 50-day and 200-day SMAs at $305.20, $298.92 and $276.01, which is positive. The stock is also above its five-week MMA at $300.92. Monthly, weekly and quarterly value levels are $298.71, $294.73 and $290.13 with my semiannual pivot at $313.60 and semiannual risky level at $324.33.
Google (GOOG) ($887.00) still has a hold rating and is 25.6% overvalued with a one-year price target at $915.77. [Read: Four Trends to Watch in the Fourth Quarter]
Google is trading above its 21-day, 50-day and 200-day SMAs at $885.38, $881.69 and $832.88, and is also above its five-week MMA at $882.17. The stock was above $900 at its May 20 high at $920.60 and again at its July 15 high at $928, and again on Sept. 19 with a high at $905.88. So far in the second half of the year, my semiannual pivots at $880.49 and $892.48 have prevented a sustained trend above $900. This week's support is $846.53 with monthly and quarterly risky levels at $946.09 and $986.18. Netflix (NFLX) ($324.62) set an all-time high at $324.70 on Oct. 1, and is well above its 21-day, 50-day and 200-day SMAs at $304.48, $278.49 and $207.88 and is also above its five-week MMA at $287.45. [Read: Biotech Stock Bubble Deflated by Cost-Conscious Buyers] Netflix continues to have a buy rating but is the most overvalued momentum stock by 94.6% with a one-year price target at $344.91. My semiannual value levels are $237.48 and $211.20 with a monthly pivot at $318.67 and weekly risky level at $333.76. Priceline.com (PCLN) ($1038.27) set an all-time high at $1,039.31 on Oct 1, and is well above its 21-day, 50-day and 200-day SMAs at $985.05, $951.77 and $789.53 and is also above its five-week MMA at $960.47. The stock has had a buy rating for more than a year and is 23.6% overvalued with a one-year price target at $1,122.18. Monthly and semiannual value levels are $990.08 and $935.65 with a quarterly pivot at $1,022.97 and weekly risky level at $1,038.67, which was tested at the high on Oct.1. [Read: Best Places to Stash Your Cash] Tesla Motors (TSLA) ($193.00) set an all-time high at $194.50 on Oct 1, and is well above its 21-day, 50-day and 200-day SMAs at $174.88, $157.6 and $85.36 and is also above its five-week MMA at $163.90. The stock still has a hold rating and is 39.7% overvalued with a one-year price target at $186.59. My monthly value level is $189.57 with a weekly risky level at $200.56. My quarterly value level lags at $129.44. At the time of publication, the author held no positions in any of the stocks mentioned. Follow @Suttmeier This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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