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The trend is your friend (or enemy): 20 stocks to watch

Last week, I wrote one article about 10 stocks making new 52-week highs and another about 10 stocks making new 52-week lows. Gold, oil and steel plays made up the majority of stocks making new highs while technology and finance companies were the ones plummeting.

Both articles gave some very basic rules on how to spot reversals while recommending investors cut their losses quickly and let their winners run. And, both articles were released mid-week around the same time of day. Yet the article about stocks making new lows turned out to be more than seven times as popular!

Why do you think that is? Sure, they're slightly more actively traded, but I believe investors are not comfortable buying into or holding commodity plays because they've already gone up so much. But they're perfectly willing to go down with the ship on blue chip brokers and technology plays, sometimes even doubling and worse, tripling up because they're invested in such "quality companies."

If I'm right, as Cher would say, snap out of it! Forget those bubble years of the past; technology -- and certainly financial -- won't be making exponential comebacks anytime soon. The trend is your friend until the trendline breaks -- oh yes, technical analysis works because it pertains directly to your investment's value. Fundamental analysis is all well and good in the long run, but it won't save you from potentially mammoth short-term losses!

I'm listing all 20 stocks, good and bad, because nothing much has changed since. Yes, some stocks have dropped and bounced a bit, but the overarching trends remain intact. So, you suffering longs have no choice but to click these strange stocks to see what uptrending charts look like, and you trend-following investors who are loving life can laugh while you see how the other half lives.

Uptrending = Good!

Downtrending = Bad!

Timothy Sykes writes the blog timothysykes.com, is a former hedge fund manager, star of the TV show Wall Street Warriors and author of the book, An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund

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Last updated: May 16, 2008: 04:22 PM

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