5 good, solid longs
I am in the mood to get into and shout about a few good longs that I am
currently involved in. Not that I am not always eyeing the signal to buy to
add to the moneymaking positions carried. Some stocks that I am into, are
quite frankly, exciting right now. In spite of a split tape and murky
environment, the following stocks are pure gems. Pure gems mean good value.
Good value means higher price points down the road. What the following stocks
have in common is an advance. Each is in an advance that ought to satisfy the
desire for more by those involved. Let’s examine the price movement and
pattern of trade of each:
American Power Conversion
(
APCC |
Quote |
Chart |
News |
PowerRating) 26.71
APCC is a technically healthy
stock. It is on the verge of mounting a move toward the recent high (28.56)
made on 8/1. The correction is over right? Isn’t that right? Don’t you sense
that in the pace of trade right now? I do. I say the corrective action that
occurred in August is done. That does not mean that the current rally breaks
out to new highs. If that should occur and that reality is close at hand then
APCC is certain to cross the recent high and get into a higher gear. I will
add to the position at that time. So the buy signal will flash if APCC crosses
28.56. That is the spot to get started or add to current holdings. All the key
inflection points express rising lines. That is very bullish. The bulls are in
control of this instrument and it pays getting involved. It’s up over 24% this
year and 55% year over year. A leader until proven otherwise. The evidence of
the tape indicates a solid play. Nevertheless, place the stop at 25.75 for
part and 23.75 for the rest.
Cadence Design
(
CDN |
Quote |
Chart |
News |
PowerRating) 16.30
Head over heals in love with
CDN. A love affair is developing between CDN and myself. Right now. That could
change in a heartbeat. The chart tells me to keep it and to add to it because
the advance is picking up steam and the head of steam could be powerful. I
invite you to gaze at a chart of CDN. Take a look at the pattern of trade. Do
you see what I see? I see an advance getting into gear that comes off a solid
base that followed a nasty decline. The best time to buy a stock is at the
outset of an advance. This stock is in the midst of an advance and I say that
it is not to late to participate. Its up 18% this year and 24% over the last
52 weeks. Not bad. It is up over 2% in the last 5 days. I am not opposed to
buying it right in here. Place the stop at
14.25
Marvell Technology Group
(
MRVL |
Quote |
Chart |
News |
PowerRating) 47.91
In an article written for
market watch a couple of years ago when it was still owned by CBS, I touted
MRVL as perhaps the best semiconductor issue out there and those serious about
making money ought to get involved. I say the same thing today. The stock has
more then doubled in value since then. I remember the emails I got in reaction
to the sentiment I expressed about MRVL. It is humorous as I look back and
realize that those know it alls that proceeded to tear into the view I
expressed actually have mostly empty space between their ears. So all I do is
reflect the tale of the tape.MRVL is a hot stock there is no question about
that. I am involved in this stock and have been for a while and it is
performing brilliantly. It is a stunning performer up 35% this year and 82%
over the last 52 weeks. It is currently extended. It has good support in the
45 zone. That is the spot to pick up shares with a trading stop at 43.50 and
an investing stop at 37.75. You long term investors out there must be a long
term investor then and give this one plenty of room. It is volatile. Don’t be
afraid of that. MRVL ought to be sold if it breaks below its 200-day line. The stock traded under 4 in 2001. Now it trades
near 50. Until the advance quits stay with it.
Procter & Gamble
(
PG |
Quote |
Chart |
News |
PowerRating) 56.90
Consider this stock
especially if your appetite does not go beyond the blue chip variety. Here is
a blue chip name (PG) that is ready to take off into higher price zones. It is
clear given the pattern of trade that PG crossing 57.40 on a close will
inspire major money to flow into it. PG is being accumulated right now. It is
on the verge of a major break out. The 57.40 high was made 12/10/04. The stock
is on the verge of moving beyond that point and a strong move in the broader
market will enable it to get there. The stock is up 3.3% this year and the
same over the last 52 weeks. Quite good. Place the stop at 53.99 for investors.
Altria Group
(
MO |
Quote |
Chart |
News |
PowerRating) 72.66
Big MO has a head of steam
behind it. It pays a nice dividend as well. The stock is now fully in gear.
Its up over 18% this year and 62% in the last 52 weeks. That is quite good. It
is a DOW leader. Why bother with dogs like MRK and PFE when you can get into
MO and begin to make some money and get a dividend every quarter as well. MO
pays 4.3%. Not to shabby. It is slightly extended now Place the stop down around the 200-day
moving average at 64.99.
Redback Networks
(
RBAK |
Quote |
Chart |
News |
PowerRating) 10.14
Lets just say that the next
level in the drama of RBAK occurred yesterday when the stock broke out in
heavy trade to close nicely above the 10 zone. The high of 11.25 made in
January 2004 is within striking distance. RBAK is a market leader right now.
It is up 89% this year and is long term over bought. The intermediate term is
in good shape and it could ramp above that 11.25 level and consolidate. It is
just getting back to where it was at the IPO back then. So does it fly after
crossing 11.25? Let it get there first then we will see. The odds favor RBK
getting there. Traders place the stop at the 50-day line at 8.25.
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.