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After many months of gains, reality finally smacked into the bulls last week when the market’s intermediate trend turned from bullish to bearish as the major indices fell through their support zones.
The triple-digit rallies we saw this week are encouraging, but there could be more consolidation in the month ahead.
However, there are certain stocks that should do well in February — even if the market pulls back.
Keep reading to get my top stocks to buy now.
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Top Stock #1: MarkWest Energy Partners LP (MWE)
Natural gas processor and transporter MarkWest Energy Partners LP (MWE) is
in a powerful bull market that began in March 2009 at under $12. It has been supported not only by the major trend line, but by the 50-day moving
average. The stochastic is now flat, and that is a positive considering its powerful move.In times of uncertainty, stocks like MWE provide stability from both their predictable operations and the high dividend they provide. MWE pays an
annual dividend of $2.56, which results in a dividend yield of almost 9%.
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Top Stock #2: National Semiconductor (NSM)
National Semiconductor (NSM), a leading manufacturer of a broad line
of semiconductors, was trading at $30 in June 2007. But in October 2008, the stock began a consolidation that evolved into one of the most powerful
of bull market formations, the cup-and-handle.
NSM appears now to be at the end of the “handle” as it finds support around its 50-day moving average.This could be one of those tech stocks that investors would want to accumulate for a possible breakout. Technically, the target for the break is
$20. Standard & Poor’s rates NSM a “four-star buy” with a target of $19.
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Top Stock #3: Pfizer (PFE)
Pfizer (PFE), the world’s largest manufacturer of pharmaceuticals,
has been in a well-defined bull channel since March 2009. Since then, support at the 50-day moving average has provided solid support for the stock.After recently peaking at above $20, PFE has pulled back on profit-taking. But the investment climate for pharmaceutical stocks is now positive,
so PFE should be bought at $19.25 or lower. S&P has a “four-star buy” on the stock with a 12-month target of $21, but my trading target is $23-$24.
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Top Stock #4: Pulte Homes (PHM)
Pulte Homes (PHM), a U.S. homebuilder and financial services stock,
fell from over $48 a share in 2005 to less than $7 in November 2008. The solid bottom for PHM began with the low in October 2008, and the many support
points since then have added to the significance of that support.My target for PHM is $14 to $16. S&P has a “four-star buy” on PHM with a 12-month target of $14.
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Top Stock #5: Rambus Inc. (RMBS)
Rambus Inc. (RMBS) designs, develops and licenses chip interface
technologies and architectures that are used in digital electronics products.Technically Rambus has double-topped with
initial support at its 50-day moving average, and then at $20. A buying climax on Jan. 20 came before a poor earnings report on Jan. 28, in which
the company failed to meet analysts’ earnings and revenue expectations.Sell short RMBS at $22 or higher for an initial target of $20, and a possibly even $16 to $17 if the support at $20 folds.
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Top Stock #6: Gabelli Global Gold, Natural Resources & Income Trust (GGN)
This non-diversified, closed-end management investment company, which invests in the equity securities of companies principally engaged in the gold
and natural resources industries, has provided a steady dividend return, as well as a way to participate in major metals mining stocks.After topping at $17.60 on Jan. 11, Gabelli Global Gold, Natural Resources & Income Trust (GGN) has
retreated from its high and is approaching a major support level at just over $15. This closed-end fund pays a monthly dividend at an annualized rate
of 10.7% with an ex-dividend date of Feb. 9. Buying before that date will earn you the next monthly dividend.Related Articles:
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