Top Picks 2007: Technician tunes in XM Satellite

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.

XM Satellite Radio (NASDAQ: XMSR) is a favorite speculative idea from technician Jack Rothstein, editor of Wealthcast. He explains, "We had viewed a move above $15.50 on a closing basis as a buy signal for XMSR and a necessary technical step to keep the current move into a new advance alive.

"The stock traded above that point right and is bullish on all cylinders, having busted through its declining 200-day moving average at 15.09. Technically, the stock is now free to move to 20 and challenge that level.

"When it happens is merely a guess. It will happen now that it broke through necessary points of resistance. It ought to be bought from current levels down to support at 15.25. If you believe in it, then you will give it room all the way down to 13.49 to stop the loss in case it fails.

"However, that doesn't appear to be in the cards right now. The stock appears to be firing on all cylinders and has blasted through to begin a new advance after building a decent base over the past 5 months after bottoming out.

"The bottom came in July after a brutal decline took it from a peak of 40.89, exactly two years ago, to fall to 9.63. It's in a new advance and ought to be held long. Overall, XMSR is my number one choice for 2007."

To see Jack's favorite conservative idea for 2007, click here.