4 stocks poised to move as the market rallies
The market breathes a sigh of
relief this morning as the refineries in the gulf region dodged a bullet and
prices come in.
Energy prices are coming in as the storm fades. Bulls will rage
this morning as stocks that ought to benefit the most are those that have been
leading all along. The rally has been modest and the burst of power likely to be
unleashed this morning ought to propel stocks that are in advancing stages of
trade. I am involved in a number of leading stocks that ought to be at the front
of the rally coming this morning. Before getting into that, look at the action
in Japan. The NIKKEI 225 is the leading major market in the planet right now.
Lots of positive goings on in Japan. I am playing Japan, employing EWJ
(
EWJ |
Quote |
Chart |
News |
PowerRating). EWJ ought
to take off this morning The NIKKEI 225 is up 16.7% this year. It is up almost
2% today. If you are involved in EWJ then you are gaining. I will get into longs
only this morning. Short covering will occur this morning as the heavily short
public indicates an unwillingness to be exposed in a vibrant market. The
question of course concerns the current move in the market post Rita. What has
to happen to extend the current late in the day mature bull market? The major
averages have to close above key inflection points. They are: SPX (cash)
1246, Dow 10720, COMP 2187 and the MID 725.
Apple Computer
(
AAPL |
Quote |
Chart |
News |
PowerRating) 53.20
Just recently wrote
about AAPL. Been adding to the position I carry. It is one that I prefer to keep
until the advance runs out of steam. It is one to trade around during the day if
you have the time and energy to pursue such tactics. I will. That is all I do
during the day. Pursue moneymaking chances and AAPL is just that. A money making
chance. The odds favor higher price points, especially if the stock can cross
53.85 on a close. The trading stop ought to be tight. That is relative of
course. Lets say this is a trade for a swing. If AAPL is used for a swing then
place the stop at 49.99. A very long-term investor would stop the loss at 39.99.
That is how extended AAPL is right now. But don’t fight the tape. Day traders
may employ the 10-day line. The 10-day line is 51.69. So see how extended AAPL
is, but the tape is on your side. The stock won’t quit and as long as that
reality stays in place then why should anyone quit on it. AAPL is the leader of
the market. It is one of the few bright spots among big cap stocks.
Hewlett Packard
(
HPQ |
Quote |
Chart |
News |
PowerRating) 28.47
Another bright spot
among large cap tech stocks is HPQ. Bright spot because of its stunning advance
that has placed HPQ in a leadership position among its peers. The stock is
leading. Printers have improved significantly over the last two years and HPQ
easily leads that space. Forget about that and just focus on the chart. The
chart tells you clearly that HPQ is a current leader. It is providing favorable
odds to persist in its advance, and momentum enabling the advance ought to carry
the stock into the mid 30’s zone. That is inevitable given the current pattern
of trade. There is much headroom here after being in decline for so many years.
The decline ended a while ago and HPQ is advancing off of a solid base built
over the last 4 years. The stock is out front and in the lead. It ought to be
owned right along side AAPL. I am involved in both. It is hard to avoid tech
stocks right now because they currently lead. Stops
placed at 25.99 for swingers.
Med Immune
(
MEDI |
Quote |
Chart |
News |
PowerRating) 31.99
Lets switch gears to
turn off the tech road and move onto another path, and run into the positive
action expressed in the price movement of MEDI. Good solid action in this market
leader that has finally moved into higher gear and firmly planted in a smooth
advance. Solid stock to be involved in right now. It is a moneymaker right now.
It ought to be played. The odds favor higher price points. Check out the chart
and observe the movement and pattern formed. The advance is young. It leaped
above the top of its base at the end of August. The gap open was immediately
tested a day later and MEDI was successful. The break out that occurred at the
end of August 2005 caused the outset of an advance. The advance is young and
this stock has plenty of upside room. There is not much resistance up to 40.
That is the level where it could stall. Today it is under 32.
Procter & Gamble
(
PG |
Quote |
Chart |
News |
PowerRating) 56.74
Again I point out that PG is on the verge of breaking out above the high made
on 12/10/2004. That takes care of a long base. It allows the stock to move into
territory not ever ventured. So I plan on going on an adventure with PG up a
road heading to parts north. PG is on a roll right now. The purchase of Gillette
is favorable. The advance that began in March of 2003 is appearing to get
extended. It paused for over a year and the apparent top it attempted to form
has not evolved into a decline. Instead it appears more like a solid foundation
to continue its advance after doing virtually nothing for the year. Today it is
angling toward higher price zones.
Monday morning
relief rally in store for market players as the sand is wiped form the eyes and
the happenings of the weekend shed as the serious action in the last week of the
quarter takes shape. Look for end of quarter mark ups. A scalpers delight. I
will provide another piece after the close and give you a blow-by-blow about the
action.
Jack S. Rothstein
Rothstein Investment Advisory Services, Inc.
3600 Chain
Bridge Road, Suite 200
Fairfax VA 22030
Phone
888-343-4825 — Fax 703-385-7232
www.jrmoney.com
— www.wealthcast.com
Jack Rothstein is the
President of Rothstein Investment Advisory Services, Inc. and is a 20-year
veteran stock trader and a money manager.
Mr. Rothstein also writes Wealthcast, a monthly newsletter about the technical
behavior of the markets. He has been quoted on Bloomberg, CNNFn, the Dick Davis
Digest and the Dow Jones Newswire. Since 1993, Mr. Rothstein also hosted
WealthCast, a radio show in the Washington DC area covering the stock market.
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