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Current DateTime: 07:55:40 24 Nov 2009
LinksList Documentid: 30328029

CNBC Stock Blog

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Aug.11
12:41 PM ET
Monday, 11 Aug 2008
Stock Pick Strategy: Use the Charts

Some people pick stocks on the news.  Some people pick stocks on hunches.  MKM Partners' chief market technician Katie Stockton relies on the charts.  They can point an investor toward some counter-intuitive moves.  For example, her first pick mixes real estate with technology.

Recommendations:

The pick is Digital Realty [DLR  Loading...      ()   ].

"Technology has proven to have very strong positive relative strength," she said.  "We've also seen signs of life in the REIT sector, so, to combine those two sectors, the potential there, we look at Digital Realty."

Runner-up on her list is Procter & Gamble [PG  Loading...      ()   ].

"Consumer staples has, surprisingly, been another very strong area of outperformance recently," she said.  "Procter & Gamble broke out above its 200-day moving average on Friday's rally...(it) is not overbought or overextended from a technical standpoint."

Westlake Chemical [WLK  Loading...      ()   ] also looks like a winner on the charts.

"It's a small-cap stock," Stockton said.  "Small-cap stocks have broken out relative to large-caps...Westlake, I think, is one of the stocks that's benefiting from that phase of outperformance."

Rounding out her list of technical winners is perennial stock-picker favorite MasterCard [MA  Loading...      ()   ].

"This one's really been a standout within the financial sector, which, of course, has underperformed over the long term," she said.  "Short-term, of course, we've seen a pretty significant correction in that stock; that correction, believe it or not, has not reversed the long-term uptrend."

Disclosures:

Disclosure information for Katie Stockton was not immediately available.

Disclaimer

© 2009 CNBC.com

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