I See Buying Opportunities Ahead In These 3 Stocks

The market peaked short-term and the correction or
adjustment will be orderly. The result of that will be a good buying chance in
stocks that express a strong upward bias. Today I will get into three stocks
that provide exactly that. In addition to that I will focus on one instrument
that is on the verge of breaking down. In this piece 3 good longs and 1 good
short will be addressed.

Comverse Technology
(
CMVT |
Quote |
Chart |
News |
PowerRating) 26.51

The stock broke out yesterday rising above the top of its base. It’s only up 8%
this year and that easily beats NASDAQ. It’s up 6.5% in the last 5 days, so the
advance just began. I began to accumulate the stock yesterday after it crossed
its former high point. CMVT has spent most of the year consolidating the gains
made in 2004. It is up 58% in the last 52 weeks. The stock is not extended. It
has traded above its 200-day line for almost a year and is in good shape
technically. The chance here is tremendous and the gains can be rather
lucrative. I invite you to gaze at a weekly chart and notice the one-day drop
that occurred back in July 2001. It fell from near 50 to 25 in a day. This week
is the first time this stock has traded at current levels in 4 years. There is
virtually no supply until it lifts to the 48-50 zones. This stock has the
potential to double in value. Won’t happen overnight. The risk reward ratio is
favorable. The stop loss ought to be placed under the 200-day line(23.40).

Utilities are hot. This electric utility pays close to 4% and is up over 13%
this year. It is right in the middle of the large pack of instruments that make
up the sector. I like the stock right now because of the action it expresses. It
trades well. That means money is made if you are long. I am long this stock and
it appears that higher price points are in the cards. The chart tells the story.
The story is positive. It made its 52-week high yesterday and the stock is up 3%
in the last 5 days, so it does have momentum. The utility sector remains
favorable and here is one instrument within the sector that appears destined for
higher price points. It currently trades above all inflection points and the
50-day line should be used to stop the loss on a portion of the position. The
200-day line for the remainder. All inflection points are rising. The momentum
is solid.

Allied Waste
(
AW |
Quote |
Chart |
News |
PowerRating) 8.55

This is not a sexy stock. It is not popular with the masses. It is not talked
about much. AW is coming off a brutal decline. Quietly get involved. There is
money to be made, so get involved in AW. The stock floats higher and is angling
toward the top of its base. The stock will challenge the 10 zone. It could peak
near 12 a share. The risk at this point is low. The stop ought to be placed at
7.99. The odds favor booking a decent gain down the road. The advance has not
begun. It is early in the game but a good time to begin building a position.

Research In Motion Limited
(
RIMM |
Quote |
Chart |
News |
PowerRating) 70.91

I am short this stock. I am short this stock because the technical underpinnings
are shaky. Look at the chart and see for yourself. RIMM is close to a decline.
It is still in the process of forming a top. Take a partial short position right
now. If the stock falls below 67.25 it’s your signal to short more aggressively
and build the position. That is the sell signal. Watch that closely because the
stock runs at a high beta and could be there this week. The stock trades below
all key inflection points. The 10-day moving average is 70.55 and that line will
get tested today. Place the stop above the 200-day moving average.