As the S&P 500 continues to breakout to multi-month highs there are still a large number of stocks lagging behind when it comes to generating buy signals. Each day I go through my stock scans and search for the most attractive stocks based on both fundamentals and the charts. (For related reading, check out the Introduction To Swing Charting.)
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Today the top four on my list come from four very different sectors, but all four have risen to the top for good reasons.
Taleo Corporation (Nasdaq:TLEO) - The provider of on-demand talent management software solutions and a player in the cloud computing craze has been a recipient of takeover rumors over the last few months. The stock shot up to a new all-time high in early December before pulling back more than 15% to below the 50-day moving average, around the $38 area. The chart combined with the nature of the business and its ties to cloud computing make Taleo attractive at current levels. (To learn more, read Moving Average Bounce.)
Huron Consulting Group (Nasdaq:HURN) - Provides consulting services to the health and education sector as well as the legal and financial sector. The stock hit a new 2 1/2-year high in December before pulling back to support at the $37 area, and is now looking attractive once again. In a world of over-regulation it makes common sense that the services of HURN and its peers will be sought after.
Oceaneering International (NYSE:OII) - The company is a supplier of products and services to the offshore energy sector, with a focus on deep water operations. The stock hit an all-time high in early December, only to fail and pull back to around the 50-day moving average, currently at the $46 area. A month of consolidation in the stock price has OII poised to breakout to a new high in the near future.
Bristol-Myers Squibb (NYSE:BMY) - The major pharmaceutical company has a plethora of drugs, but may be best known for Plavix and Avapro. This is one sector that has been overlooked for years and is starting to perk my attention again. Late last year, the stock rallied to a nearly 10-year high and has since pulled back to support around the $33 area. With over a 4% dividend, strong chart and improving sector, BMY could be worth a shot. (For related reading, see Blending Technical And Fundamental Analysis.)
The Bottom Line
The overall U.S. equity market has been strong through the first few weeks of 2012 and the major indices are nearing overbought levels. This is important to know because it may suggest a typical pullback in the coming weeks that will once again allow investors better entry points into the stocks on their wish lists.
One of the many keys to making money investing in stocks is the entry price. Therefore I suggest you look to buy as close to the support levels I mentioned and in this type of environment keep tight stop-loss parameters to limit any big losses. (For more information, read The Stop-Loss Order - Make Sure You Use It.)
I currently do not own any of the stocks above, but as I mentioned they rose to the top of my scanning process today and could be bought in the coming days or not at all. It largely depends on the action of the overall market.
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At the time of writing, Matthew McCall did not own shares in any of the companies mentioned in this article.