Embrace Boring Trades

 | Jul 09, 2014 | 12:48 PM EDT
  • Comment
  • Print Print
  • Print
Stock quotes in this article:




Don't like this volatility in the momentum names? Was the drop at the end of the first quarter a little too much to handle? Are you afraid it is going to happen again?

Go boring then. Just find a few Dow Industrial names that you feel will still be around five years from now, which will at least give you a decent dividend while offering some upside. Cisco (CSCO) and Wal-Mart (WMT) top the list from the chart side for me at the moment.

Cisco is a long-term holding for me and I'm happy to collect a 3% dividend as things play out. In the short run, though, there is a cup-and-handle pattern playing out. Today's move shows a push through the handle to the upside. But this has hallmark traits because it is the continuation of an uptrend. The depth of the cup is only a portion of the move and the time frame of the cup is only a few weeks against a multi-month move higher.

Cisco (CSCO) -- Daily
Source: StockCharts.com

I have a target of $26.20, but I do think CSCO could reach $26.50. I am adding to my long-term shares with some swing trading shares now. A close below $24.50 would take me out of the long swing shares.

Wal-Mart isn't quite as strong right now. The pattern almost looks like some evil eyes, but I see it as an evil fighting now for good. Maybe Darth Vader at the end of Return of the Jedi kind of evil eyes. In reality, this is more of a "W" pattern targeting at least $78.50, where resistance awaits. Normally, I prefer to see the right side of the "W" with a higher price than the left side, but the positive moves in the RSI, MFI and CCI tell me momentum and cash are coming into this name.

Wal-Mart (WMT) -- Daily
Source: StockCharts.com

Given the overall market, I see WMT as a more conservative play and one some traders and investors will move to if things get bumpy. A 2.5% dividend isn't half bad either, so I like taking on WMT as a slightly oversized, long-term play, with the idea of selling down to a normal sized long-term position at $78.50 -- or if $74.50 is lost on the downside.

Columnist Conversations

Hug declines in Advance Auto Parts (AAP) and Dick's Sporting Goods (DKS) made for great chances to buy stock a...
Pepsi is trading at new all time highs today. The stock is up 0.7% and is taking out major resistance near the...
FIBOCALL: AAP down 22% "FIBOCALL: AAP opens much lower today. We took a look way back to see where support ...



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.