Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.
Rite Aid (NYSE: RAD) is the favorite conservative idea for 2007 from Jack Rothstein, editor of Wealthcast. The technician notes, "RAD recently broke out above the top of its base, making it a low risk choice for 2007.
"It trades as liquid as water and is easy in and out. For added safety, the stock can be bought in stages down to the 4.75 zone. The buying may begin right now. It has solid support at 4.70. The 200-day average price is 4.44. The stop ought to be placed below that line at 4.39.
"RAD is a leading stock this year, up over 50%, and the current advance expresses no hint at turning. Having risen above the top of its trading range and base the other day hints at higher price zones down the road. It trades up on all cylinders with the 10-day line at 5.16.
"Technically, if it's able to angle higher and go topside 6.51 on a close over the next quarter, then it is likely to ramp to test the 10 zone. That is the risk-reward ratio. The odds, given the price pattern, favor a rise to test the high at 6.50 made over three years ago, and that accomplishment will enable RAD to take off."
To see Jack's favorite speculation for 2007, click here.
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