Swing trading is a strategy in which stocks are bought for expected gains in a period of weeks to months, and a leader in this area is Melvin Pasternak.

The editor of Swing Trader says that in the current market environment, his intention is to "go long on stock with positive earnings surprises and strong technicals." One candidate that meets this criteria is Boeing Co. (NYSE: BA).

The advisor explains, "Wall Street had estimated BA would earn $1.16 per share on $16.2 billion in sales. Instead, the aircraft giant made $1.35 per share on $17 billion in revenues. When results were announced, the shares were trading near $104; they subsequently gapped up to near $108."

Pasternak continues, "Although BA was not able to hold its gain given the massive overall market selling pressure, it finished virtually unchanged during last week's decline. In so doing, its relative strength soared. When the market stabilizes, it should be one of the leaders of a recovery rally."

Technically, he states, "BA remains well above its 10-week moving average. It is also above the upward-sloping 30-week, the signature of a stage II advance. Technically, the ADX and MACD remain on strong buy signals."

The technician concludes. "Although the stock has been overbought on measures such as stochastics and RSI for some time, it has been able to continue its advance. I think BA can trade much higher and have set a target of $119.95. I would exit the position if it breaks a mid-June low of $93.58."

Each day, Steven Halpern's TheStockAdvisors.com features the latest investment ideas and market commentary from the financial newsletter community.

Boeing: A swing trader's bet originally appeared on BloggingStocks on Wed, 01 Aug 2007 11:48:00 EST. Please see our terms for use of feeds.

"Another week and another 6-1/2 year recovery high for the S&P 500," says technical analyst Melvin Pasternak -- who sees several reasons to remain bullish. Indeed, Friday's close put the index above 1500 for the first time since September 2000. So what's next?

The editor of Swing Trader believes the S&P is now within "easy striking distance" of the all-time closing high set March 14, 2000, at 1527.46 and the intraday peak of 1552.87 made that same day.

As the rally over the past week unfolded, he notes, stocks rose on both economic statistics and takeover activity. He points to last week's report from The Institute for Supply Management (ISM), which saw its Manufacturing Index increase from 50.9 in March to 54.7 in April.

He explains, "That number allayed fears the economy might be cooling too quickly." He adds, "Even Friday's tepid non-farm payrolls number of 88,000 did little to dishearten the bulls. Instead, traders put together all the week's statistics and saw an economy that was not too hot nor too cold."

This "Goldilocks scenario" of moderate economic growth and tepid increases in labor costs, he explains, means inflation should stay low. As a result, he says, "This increases the likelihood the Fed will leave interest rates unchanged or even lower them in the coming quarters."

Continue reading S&P 1500: What's next?

S&P 1500: What's next? originally appeared on BloggingStocks on Sun, 06 May 2007 13:25:00 EST. Please see our terms for use of feeds.