Buy Stocks That Stood Strong This Month

Some incredible events have occurred over the last month, driving the market
about 6% lower from the highs established in February. So far, despite the
overwhelming international situations that have affected the market, the S&P 500
and other major indices have been able to maintain their long-term bullish
trends. After enduring a week of shocking headlines from the aftermath of the
earthquake and tsunami in Japan, the market is now digesting the news that the
UN has established a no-fly zone in Libya, supported in part by the United
States. This action has oil prices looking to move higher again; however the
market appears ready to rally higher after the news from Libya. Despite the
headline-driven crosswinds that the market has faced, the major indices such as
the S&P 500 have been able to maintain their bullish trends. Last week, the S&P
500 rallied after touching its 100-day moving average, one of the trend lines
often used to determine whether the market is in "bull" or "bear" mode.
The fact that these trend indicators continue to move higher suggests that
investors are still moving cash from the sidelines back into stocks. The
market's short-term strength suggests that traders should be looking for
opportunities to increase their equity exposure, but which stocks are the best
to be looking at? As things stand, one approach is to buy strength on the
strength, meaning we're looking to take positions on those stocks that have
held up relatively well during the six percent correction that stocks have
undergone. The lists below represent some of the stronger prospects from the S&P
500, Nasdaq 100 and Russell 2000 for companies that are likely to resume their
charge higher as the market conditions improve. These stocks are the most widely
watched by the analyst community in each of the indices and each remain above
their respective 50-day moving averages with short-term trends that are trending
higher. In other words, these are the stocks that have been thriving during the
latest weakness. To give an idea of how much of a standout these companies are
with respect to their peers, the lists of stocks below represent only 1.8%, 4%
and 0.05% of the S&P 500, Nasdaq 100 and Russell 2000 Indices respectively.
While there are going to be a number of oversold stocks that may experience
larger short-term bumps in price, these stocks are more likely to be the ones
that see a breakout move higher to new trading levels as they lead the market
higher. S&P 500 Index Company Ticker Close 50-Day St. Jude Medical STJ $48.09
$45.07 Gilead Sciences GILD $40.15 $38.98 Rowan Companies RDC $40.43 $37.83
Sprint Nextel S $5.05 $4.50 Chesapeake Energy CHK $33.37 $30.82 Diamond Offshore
Drilling DO $75.81 $73.58 Norfolk Southern NSC $66.28 $64.16 Stryker Corp. SYK
$61.62 $60.01 CSX Corp. CSX $76.22 $71.86