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Even though I remain in cash, I am conscious that there are other investors who are in the market and would like to add to their positions. So I have trawled the top 300 and found two stocks I like: BHP Billiton and Monadelphous Group.
Let’s take a look at each in turn.
BHP is still well off its double top highs of 2007 and 2011:
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While I don’t see any sign of a sustained resurgence in the coming months...
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...I do see the prospect of a short term move:
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BHP is one of the few stocks that has not enjoyed a recent move higher. I note that on the day of writing (Wednesday, 23 January), it has moved over 1%. There could perhaps be another 10% move in the coming weeks which, in an unpredictable market, is not too bad at all. If you wait for a dip – rather than buying in on a strong day - you could be in the money quite quickly. But remember: you are not buying into a long bull run; this is a short-term move.
The other stock I quite like is Monadelphous, another mining related favourite of mine:
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I prefer MND to BHP as it gives you a better chance to get set plus it has a bigger move ahead. The retreat (or pullback) is underway and has still some time to complete and it will be important to see it does not go too far below zero. If you get on board MND, you need to watch that the bigger pullback in the weekly chart below does not set you back:
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If you can catch this bigger pullback, then the move higher for MND is much more encouraging and should last a couple of years.
And that excites me!
Enjoy the ride
Tom Scollon |