Yahoo Finance 5 Stocks to Play on a Pullback
It's been 44 trading days since the market coughed-up even a modest retreat. To be precise, the last time the S&P 500 fell more than 1% in a single day was December 28th, and even that dinky dip has been all but lost within a greater 30% rally which traces its roots to October.
This is not to say that a sell-off is in anyway imminent or overdue, because stocks don't fall just because they've risen. It is however, a reminder of how frustrating this rally has been by refusing to offer an entry point, or a second chance, to anyone who wasn't on the bandwagon right from the start.
As a result, there are immeasurable amounts of money that have been earmarked to migrate into equities but are simply waiting for the right time to do so, because, as Kim Caughey Forrest of Fort Pitt Capital says, "I think the worst thing and investor can d0 is over-pay for a stock."
To that extent, the senior analyst from Pittsburgh has a list of ideas she's waiting to act upon and without too much prodding, shared 5 of them with us:
SanDisk (SNDK)
The world's flash memory chip leader had a great October, but unlike the market, and even more so the chip sector, that's where the party stopped, with the stock basically going nowhere for the past 5 months. Still, Caughey Forrest feels the proliferation of mobile devices, as well as a recent joint venture between Micron (MU) and Intel (INTC) suggest better days are coming both for the group and for SanDisk, which she likes, but "wants to buy it cheaper, closer to $40."
Intel
Fittingly, the microchip giant is also on her pullback list. Unlike SanDisk, the top semiconductor maker has had the wind at its back, gaining about 12% so far this year and 35% since October. While the stock has stalled since late January, it hasn't fallen. If and when it does, "we would probably dive in on any bad news and hope to buy it closer to $25 than $30," Caughey Forrest says.
Microsoft (MSFT)
While Microsoft's rise to a four year high has caught the eye of many long time former critics, at least Caughey Forrest can say she was along for the ride, having recommended buying the software giant 9 months ago and 30% cheaper during her last Breakout appearance in June. Far from selling, she's been recently re-invigorated by the Redmond, Washington behemoth's upcoming release of Windows 8 and is itching to buy more, but wants to do so under $30.
Boeing (BA)
After a good 6 month rally, shares of Boeing have been languishing lately. Its 2% gain this year is sharply behind the 9-plus percent advances enjoyed by the S&P 500 and Industrial sector (XLI). "Just like the 7-8-7," Caughey Forrest says, "one day we're going to see this thing take off." But why? In a word, fuel. "It's pretty easy calculus to do. If you can save 25% on fuel by buying a new plane, you just might shelve some of your existing fleet."
Honeywell (HON)
And finally, she's also stalking Honeywell, another play on aviation and an aging U.S. fleet of planes. The stock of this former member of the Dow Jones Industrials is up nearly 50% from its 52 week low, and Caughey Forrest would love to get the chance to buy it cheaper.
Do you have a pullback plan in place? What's on your List?