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Stock Up on Stocks

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Don't fight the run of the market.

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The markets have run a great deal. And despite what bears may want you to believe, the simple truth is yes - it could easily continue. Rather than look at fighting it, why not start building a list of stocks you want to buy that are exhibiting excellent technical improvement.

The key is to always identify and set your stops accordingly - most importantly, never being afraid to take a stop, as that's what they're for. If the market continues to move higher, you'll participate; if it doesn't, your stop will protect the severing of any major limbs. Here are some I'm looking at going forward.

I bought Morgan Stanley (MS) on Friday, as it broke above the key line noted on the chart below. With a stop at the 50-day, the risk reward here is in my wheelhouse, and any digesting around the $25 level will have me building.


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Boeing (BA) recently skirted death and has recently not only improved its technical condition, but broken out of a trend line going back to January. The volume on Thursday indicated accumulation, and I suspect after some minor retracement, this stop will be poised to head towards its January highs. With a stop at the death line, also correlating with the 50-day, this is a name I'm looking to build this week.


Click to enlarge


Analog Devices (ADI) is a semiconductor that seems to be a bit slow in participating with the partial bear-stomp we've seen of late. This either means the stock is flawed and lagging for a reason, or it could be that it's just flying under the radar, awaiting its real move. As you can see in the chart, the stock has notched a head-and-shoulder pattern on the daily chart - often a topping sign. If this pattern fails, however, it may catch many off-guard, leaning the wrong way and sparking a decent rally back towards the mid-twenties. I'm looking to initiate a position on a light volume move back towards the 50-day, with a stop on a break of the April 3 low of $19.36.


Click to enlarge

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Position in MS.

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