Don’t Miss the Gravy Train
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The stock market has made a huge run in the past two months, with the favorable response to the Fed’s QE2 policy pushing the S&P 500 above the April high at 1,220. Now that this important level has been breached, the train could quickly accelerate. So it’s time to jump aboard my top picks for stocks to buy in November. |
 Double Your Money on Every Trade You Make |
Top Stock #1: AmerisourceBergen Corp. (ABC)
| Pharmaceutical services company AmerisourceBergen Corp. (NYSE: ABC) provides drug distribution and related services. Earnings growth of more than 32% has made the stock an institutional favorite. TheStreet.com rates the stock a “buy,” and S&P says that ABC should benefit from health care reform and “likely will gain share in the long term.” S&P maintains a “four-star buy” with a 12-month target of $36.ABC has been in a steady bull channel for more than a year, supported by the 50-day moving average. The stock is up more than 80% since its low in March 2009, and now it appears to be getting stronger as the stochastic is turning up. Following a consolidation within the familiar outlines of a “cup,” a breakout at $33 yields a trading target of $39.
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Top Stock #2: AT&T (T)
| Blue chip AT&T, Inc. (NYSE: T) fell from a high of almost $43 to under $22 at the bear market low. This household name formed a bottom (cup), then broke from the right side of the cup, which completes a double-top. Often stocks will break from a top like this only to immediately succumb to profit-taking. It is at this point that some of the timeliest purchases are made. The technical target for the breakout is $32.50. S&P rates the stock a “five-star buy” with a 12-month target of $33. AT&T pays a dividend of $1.68 for a yield of 5.94%.
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Top Stock #3: Aberdeen Asia-Pacific Income Fund Inc. (FAX)
| Aberdeen Asia-Pacific Income Fund Inc. (AMEX: FAX) is a closed-end, non-diversified management investment company that invests in Australian and Asian debt securities. FAX is well known to investors who seek high dividend yields while participating in Asian markets.FAX has a history of sell-offs that are often followed by swings up to new highs. In October, a spike was preceded by a double-top breakout. The pullback offers an excellent opportunity to purchase this high-yielding, closed-end fund for a move higher. FAX pays an annual dividend of 42 cents, which gives it a dividend yield of 6.09%.
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Top Stock #4: Darden Restaurants (DRI)
| Darden Restaurants, Inc. (NYSE: DRI) operates about 1,800 restaurants, including Red Lobster, Olive Garden, LongHorn Steakhouse, The Capital Grill, Bahama Breeze and Seasons 52 chains.The stock is trading within an ascending triangle. Now around $46, a successful breakout from the triangle at $48.50 would yield a target of $58. Ford Equity Research has a “strong buy” on DRI with a 12-month price target of $65. They note that earnings forecasts have been raised recently following an improving growth rate.
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Top Stock #5: Motorola (MOT)
| Motorola, Inc. (NYSE: MOT) topped above $9 in November 2009, and then fell below $6 in February 2010. But since then, it has been consolidating within a broad “W” formation. Late in August, it reversed after a signal from our proprietary Collins-Bollinger Reversal (CBR) indicator and executed a gold cross.On Sept 8, with the stock at $7.86, I said, “A break above the resistance line at $7.80 gives a target of over $9.” Well, MOT didn’t quite make $9, but it did make it to $8.74 before profit-taking hit. A breakout from the “W” would give a technical trading target of $12.50. S&P has a “four-star buy” rating on the stock with a 12-month target of $10.
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Top Stock #6: Novellus Systems (NVLS)
| Novellus Systems, Inc. (NASDAQ: NVLS) makes equipment that is used in the fabrication of integrated circuits.The stock broke from a compound top late last month with a trading target of $33. Note the high volume of accumulation prior to the break. Credit Suisse rates the stock an “outperform” and recently raised its earnings forecast following a Q3 that beat estimates. They have a 12-month target of $35 for NVLS.
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