Thursday October 18, 2012
by Richard Schmidt, editor Stellar Stock Alert
In election years, the S&P almost always makes its annual highs in November and December. We don’t see any reason this pattern will be different this year. Whether the market corrects or not over the near term, we see investors coming into the market in November and December.
The uncertainty of the election will be behind us. We’ll be in the midst of the feel-good time of year between Halloween and New Year’s. And the U.S. is still the best place in the world to invest.
American Express (AXP) is running sideways; the good news is these shares are still above the 200-day moving average, which means they’re still in an uptrend.
October could pull these shares down to or below the long-term line. But they should bounce right back up in November and December. AXP remains a buy, especially if the price dips giving you an excellent opportunity to jump in.
Bank of America (BAC) moved up strong in September, but cooled off a little as the month subsided. We like what BAC has done to shore up its business in recent months.
If the housing market can get its feet under it, BAC should be one of the big winners. We may see a short-term dip in October, so be ready to buy in if it does. BAC is a strong buy.
After falling hard in the spring, EMC Corp. (EMC) has looked amazingly strong in recent months. It put in a double bottom in the summer and in September gave us the buy signal we’ve been waiting for.
The 50-day moving average moved over the 200-day average, telling us this uptrend is strong and ready for more growth. EMC is a strong buy.
Health care Services Group (HCSG) is developing a very consistent pattern: It moves up, runs sideways, then moves up again, and runs sideways again. We like the pattern.
As one of our more conservative positions, HCSG has served us well. It remains in a strong uptrend and a strong buy.
Learn more about this financial newsletter at Richard Schmidt's Stellar Stock Alert.