High Flyers Vs. High Yield

Forget Apple (AAPL); sink your money into high yield.

   

Video Transcript

I’m still of the thought that we’re in a bearish expanding triangle on the S&P 500 futures, which will go down and the fill the gap indicated on the chart in the video. I show you the MACD on the 610 chart, so every candlestick that you see took 610 minutes to actually form.

You can see a huge gap on the chart from the first trading of the day. You can see all of the bearish divergence. Some people call it ‘hopium.’ But what I think is that we’re going to go down and fill the gap when this irrational exuberance peters out. I picked eight new long stocks for my Trending123 traders that have dividend yields between 12% and 24%, and I think we’re going to see rotation into the less risky, high dividend yield plays and out of the stocks that have been going gangbusters.

I would use Apple (NASDAQ:AAPL) as an example, but that stock continues to just hang around 52-week lows. But some high-beta stocks, like Herbalife (NYSE:HLF), have had a great run.

HLF was in the mid-$20s. It took a matter of weeks to rally into the mid-$40s. Now, if we were to look at its 60 minute chart, it’s down some 30% just since the middle of January.

The thesis here is with so many stocks looking and acting like this, even though the broader averages technically are at new five-year highs, the amount of stocks that are participating – especially if you were to look at the NYSE McClellan Oscillator (NYMO), there are fewer and fewer stocks that are actually participating in the rally.

So, yes, there have been a lot of stocks that have “V” shaped rallies in 2013, more and more continue to sink down and hit new lows. So, the eight new stocks that I identified for my Trending123 members are going to be stocks that investors will be seeking rather than these high-flying stocks that were great up until a couple of weeks ago and now have been falling apart.

InvestorPlace advisor John Lansing tracks the charts all day and offers expert technical analysis in his day trading, options and trading services: Power Trading at the Open, Parabolic Options and Trending123.  For more information on which service is for you click here.


Article printed from InvestorPlace Media, http://investorplace.com/247trader/high-flyers-vs-high-yield/.

©2014 InvestorPlace Media, LLC

Comments are currently unavailable. Please check back soon.