Top 6 Stocks for September

by Sam Collins | August 26, 2010 1:45 pm

The Best Buys to Kick Off Fall

  

Since mid-May, the major indices have been stuck in a trading range. On critical days, it looked like almost a sure thing that prices would break higher, only to reverse and catch buyers in a classic bull trap. However, the bears fared no better. On numerous occasions beginning with the flash crash on May 6, it looked like the markets were in free-fall. But the bears who jumped in on the short side found themselves in a trap of their own making, as prices reversed and shot higher with determination. The question of who is in charge of the market is up in the air, but what is not in question is the strong bullish signals the following six stocks are giving off.

[1] 26 Broken Stocks to Sell Now[2]

 

Top Stock #1: BJ’s Wholesale Club (BJ)

BJ’s Wholesale Club, Inc. (NYSE: BJ[3]), the third largest U.S. membership club chain, broke from a triangle[4] in early April, and consolidated for three months before the big July 1 break that took the stock from $40 to $47 in just three weeks. A generally difficult stock market led to profit-taking and drove the stock back to the triple-top breakout line at just over $40, where our internal Collins-Bollinger Reversal (CBR) indicator issued a buy signal. Note the undervalued stochastic and BJ’s ability to trade above its 200-day moving average[5]. New highs are possible for BJ this year. S&P has a “four-star buy” rating on BJ.  26 Broken Stocks to Sell Now[2] See Key[6]

 

Top Stock #2: Caterpillar (CAT)

Blue chip Caterpillar Inc. (NYSE: CAT[7]), which is known for manufacturing construction and mining equipment, diesel and natural gas engines, and industrial gas turbines, has been in bull market since the stock market bottomed in March 2009. The advance from its bear market low at $22 has been very orderly, defined by its ability to stay above its 200-day moving average and its bullish support line. It recently retreated from a double-top at around $73, but is still above the 200-day moving average and the uptrend is intact. Any further weakness could be used as a buying opportunity. S&P has a “four-star buy” rating on CAT.  26 Broken Stocks to Sell Now[2] See Key[6]

 

Top Stock #3: Duke Energy (DUK)

Duke Energy Corporation (NYSE: DUK[8]), which operates in three main segments — electric and gas generation, transmission and sales — has been consolidating within a saucer formation since December 2009. A break through the double-top at just under $18 would be a significant technical development. Note that the stochastic is undervalued and there has been significant accumulation of the stock since April. Ford Equity Research projects that Duke will outperform the market over the next 12 months. The stock pays an annual dividend of 98 cents, or a yield of 5.69%.  26 Broken Stocks to Sell Now[2] See Key[6]

 

Top Stock #4: Home Properties (HME)

Real estate investment trust (REIT) Home Properties, Inc. (NYSE: HME[9]), which engages in the ownership, operation, acquisition, development and rehabilitation of apartment communities, has been in a bull market since March 2009. The stock has progressed higher despite a ragged real estate market. Currently the stock is consolidating within a compound “W” formation with resistance at just under $52. It has consistently held above its bullish support line since July, and recently triggered a buy from our internal Collins-Bollinger Reversal (CBR) indicator. A break above $52 would provide a trading target of $56. The stock pays a dividend of $2.32, or a 4.69% yield. S&P has a “five-star strong buy” rating on HME.  26 Broken Stocks to Sell Now[2] See Key[6]

 

Top Stock #5: Motorola (MOT)

Wireless and networking equipment and mobile communications maker Motorola, Inc. (NYSE: MOT[10]) topped at over $9 in November, and fell to under $6 in February. But since then, it has been consolidating within a broad rectangle. It briefly broke through the resistance line of the rectangle in July, ran to over $8, and pulled back on profit-taking. Late in August, it reversed on a signal from our internal CBR indicator and executed a gold cross. A break above the resistance line at $7.80 gives a target of over $9. S&P has a “four-star buy” rating on the stock with a 12-month target of $10.  26 Broken Stocks to Sell Now[2] See Key[6]

 

Top Stock #6: Yum! Brands (YUM)

Restaurant company Yum! Brands, Inc. (NYSE: YUM[11]) had been in a bull market for over 10 years. In early March, the stock broke from $36 to $44 in just six weeks, but then entered a period of consolidation with support at $39 and resistance at $42. If YUM breaks from the current descending triangle, the trading target is $50. Credit Suisse Equity Research rates YUM an “outperform” with a target of $50.  See Key[6] 26 Broken Stocks to Sell Now — There’s a long list of companies that have jumped off their lows but are still trading at dirt-cheap prices. But BEWARE: These “bargain” stocks aren’t just cheap, they’re broken. Get their names here or risk losing your shirt.[12]

Source URL: https://investorplace.com/2010/08/top-stocks-to-buy-for-september/

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