The U.S. stock market's choppy, volatile pattern continues. Technically, the Dow's rally from the February 2008 and March 2008 market lows around 11,800 to the 13,100-range is displaying signs that it may have been a false rally: the rally failed at the 200-day moving average and closed Thursday, for the second straight day, below the 50-day moving average.

Further, the fundamental story does not look good, either: $130 per barrel oil, a housing market showing no signs of recovery and the specter of scant job creation for at least the next two or three months does not exactly represent the strongest magnets to attract new money to the market.

On February 4, 2008, I provided five defensive stocks worthy of consideration. Listed below is a progress report, with revised recommendations for each.

Procter & Gamble (NYSE: PG) - a diversified consumer products giant, extraordinaire.
February 4, 2008 price: $66. Sell / Stop Loss: $47.
May 22, 2008 price: $65.62. Revised recommendation: I'd continue to hold PG here if I owned it, definitely buy it if I didn't. Revised Sell / Stop Loss: $47.

Cola-Cola (NYSE: KO) - because no one ever went broke, holding Coke.
February 4, 2008 price: $59. Sell / Stop Loss: $43.
May 22, 2008 price: $58.27. Revised recommendation: I'd continue to hold KO here if I owned it, definitely buy it if I didn't. Revised Sell / Stop Loss: $47.

MOST NOTEWORTHY: Acergy, Casey's General and Corinthian Colleges were today's noteworthy downgrades:

• Citigroup downgraded shares of Acergy (NASDAQ: ACGY) to Sell from Hold as they see risk to the company's backlog and believes the recent share rally is not supported by business operations.
  
• Casey's General (NASDAQ: CASY) was downgraded at Friedman Billings to Underperform from Market Perform citing headwinds that include weak gas comps.
  
• Banc of America downgraded shares of Corinthian Colleges (NASDAQ: COCO) to Neutral from Buy as they believe the post-legislation lending overhang will limit further share upside until COCO can show its students can access federal funds with minimal disruption.

OTHER DOWNGRADES:

• Bernstein cut EMC Corp (NYSE: EMC) to Market Perform from Outperform.
  
• Baird lowered Woodward Governor (NASDAQ: WGOV) to Neutral from Outperform.
  
• Merrill downgraded Sealed Air (NYSE: SEE) and Bemis (BMS) to Sell from Neutral.

When the market acts like an erratic fish, go with the known. Think established companies. In industrial sectors. Something, as my cigar-smoking Uncle Nick used to say, "as strong as the New York Giants' defensive front four." (And in case one hasn't noticed lately, the defensive front four of the Giants, favorite football team of yours truly, is still pretty good.)

With the above in mind Woodward Governor is worth a review. Woodward Governor Company (Nasdaq: WGOV) designs, manufactures, and services energy control systems, components for aircraft/industrial engines, turbines, and other power equipment.

Analysts like WGOV's recently-completed restructuring, which is bearing fruit and shows signs of improving Woodward's already solid position in its control systems business.

Woodward Governor Company (NASDAQ:WGOV) designs, manufactures, and services energy control systems and components for aircraft engines, industrial engines, turbines, and mobile industrial equipment. The company's customers are primarily original equipment manufacturers in the power generation, oil and gas processing, and marine industries.

The firm pleased investors in November, when it reported fourth-quarter EPS of 55 cents and revenues of $232.9 million. The Street had been looking for 48 cents and $228.2 million. Management also guided FY07 EPS to $2.05-$2.15 ($2.03 consensus) and FY07 revenues to about $957.6-$983.3 million ($924.4M consensus).

The news popped WGOV shares into a positive eight-week trading channel, which has since been supported by word of a four-year supply agreement with General Electric Energy (NYSE:GE) and a burner system development agreement with Tenneco Inc. (NYSE:TEN). The price is currently consolidating at the base of the channel, where oversold CCI, MACD, and Stochastic technical parameters suggest the potential for a rise back toward the top. Correspondence of the stock's 30-day moving average to the base of the channel backs the rebound notion.

Brokers recommend the issue with two "strong buys," one "buy" and two "holds." The WGOV P/E ratio (19.47), Price to Sales ratio (1.55), Price to Book ratio (2.72), Price to Cash Flow ratio (13.13), and EPS Growth rate (71.88%) compare favorably with industry, sector, and S&P 500 averages.

The stock is one of those used to calculate the S&P 600 SmallCap Index. Institutional investors hold about 63% of the outstanding shares. Over the past twelve months, WGOV has traded between $27.45 and $40.94. A stop-loss of $34.20 looks good here. Note that the company is expected to report fiscal first-quarter results in mid-February.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.