Keep an eye on the following stocks for potential breakouts using fundamental and technical analysis. Because everyone’s risk tolerance is different – view these for educational purposes only and or paper trades. The fundamentals were gathered from IBD (Investors Business Daily) and the technicals are mine.
As of this post-
MCD (McDonald’s) = RS (relative strength) is 94 and an EPS (earning per share) of 90 along w/ decent ROE (return on equity). I like the chart if it breaks out above 64. The model will not chase it past 67. A stop would be placed 8% from entry or 55.44 if you are willing to risk more. An individual stock trade does not amount to more than 10% of the M48 model. This stock was mentioned on the Pro Investor Show a few weeks back. Close on Friday was 60.59.
CMTL (Comtech Telecommunications Corp.) = RS is 96 and EPS is 91. The M48 likes it on a break above 50.55 w/ a stop at 8% back from entry or 44.54 at the most. Close on Friday was 48.95.
SXL (Sunoco Logistics Partners) = RS is 88 and EPS is 87. Very thinly traded and not interested unless it breaks above 50 w/ a stop at 43.11. Close on Friday was 43.79.
CVX (Chevron Corporation) = RS is 87 and the EPS is 92. The M48 likes CVX w/ a close above 80 with a stop at 70.91 or even tighter at 73.60. Close on Friday was 79.00.
The M48 has a 33% long position in the S&P. This should be a key technical week which will determine if the model increases its percentage long from 33%. I’ll let you know. If and when we break 820 on the SPX (S&P cash) = all bets are off and we go back to cash.
Investing and trading with STOPS is a plan. BUY & HOLD is not a plan unless the position(s) continue to trend in your direction at which time you would use trailing stops along w/ a profit taking strategy based on technicals. So easy but so few have the time to acquire the discipline. Hence, which is why clients/subscribers follow the M48 model which teaches discipline while implementing diversification along w/ market timing – which is a plan.
Videos coming soon.