Ten of the Dow's Most Oversold Stocks

The lagging Dow Industrials tried to catch up with the S&P 500 last week and this month's analysis of the most oversold Dow stocks reveals some new opportunities in these high-yield, big cap stocks, says MoneyShow's Tom Aspray.
The relentless nature of the stock market's rally in 2013 has made several long-term bulls nervous about the near term outlook, even though they remain bullish long-term. The gains of the past two months have been contrary to the historical pattern which has many wondering about how stocks may do this month.
My analysis, as discussed in the Week Ahead column, suggests that November may be a choppy month, but the breakout in the weekly NYSE A/D line does indicate that stock prices will be higher by the end of the year. There are some early signs that investors are rotating to more defensive stocks, which makes this month's scan of overbought/oversold Dow stocks particularly interesting.
I use Starc band analysis to identify overbought and oversold conditions. When a market or equity is close to its upper monthly Starc band (Starc+), it is a high-risk time to buy and considered overbought. Conversely, when a stock is close to the lower monthly Starc band (Starc-), it is a lower risk time to buy and is considered oversold.

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Once the list is obtained, I then look at the monthly, weekly, and daily analysis of each stock to find new opportunities. All of the most oversold Dow stocks have weak monthly relative performance patterns including International Business Machines Corp. (IBM) which is at the top of this month's most oversold list. It is just 10.2% above its monthly starc- band and is down over 6% this year.  (more)

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