Start the conversation
My neighbor Frank knows I trade for a living. He's been asking me what to do right now in this tricky market environment.
You might be in a similar situation as Frank. He's about 10 years away from retirement. He's been investing for years, with the power of the bull market giving him a nice nest egg.
Now he knows he needs to make some changes, to be in a good spot to retire. His biggest question is always about where he can "store" his money right now. He wants to know what's safe.
He wants income.
He wants to make money on the stocks he's holding, as I imagine you do, as well. He has 10 years before retirement to reinvest those dividends.
Frank also spent years working at Procter & Gamble (NYSE: PG), a name synonymous with yield. PG increased its dividend for 63 years, landing it on the Dividend Aristocrat list. Just two weeks ago, it increased its dividend by 6%.
Yields are up now. With the stock market still down about 14% from its record highs in February, yields have climbed from an average 1.9% in February to 2.4% in April.
Of course, you don't have to settle for just yield. You can buy stocks with healthy yield and that are climbing higher, so you can get paid to hold it and see your investment grow.
To find those stocks, I turn to the technicals. Technical signals don't lie - they give you solid data on price trends so you know what's heading up, down, or sideways.
They're the EKG of this market, showing you exactly what's going on.
Today, the technicals have led me to three breakout income stocks that are flashing the key bullish signals I look for when buying and that give you reliable yield...[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]
How to Spot a "Breakout" Stock
Anyone following me knows I love technical signals.
In fact, I've spent 25 years using technical analysis to trade the market. I know it can sound complicated, maybe boring - but it can actually be very simple and incredibly powerful.
In its simplest form, technical analysis is the study of price. Of course, the trick is to know how to use technical analysis to predict price movement and position yourself to profit. You need to find "the trend."
You've probably heard me say "the trend is your friend." It's the first of my 10 Trading Commandments.
It doesn't matter if the trend is up or down - when you find it, you can buy or short to make money.
And my absolute favorite trend line is the 50-day moving average. This indicator is the lifeblood of the technical analysis world.
The 50-day moving average is the average of a stock's closing price over the last 50 days. It's the first indicator I look at to find "breakout" stocks - stocks that are rising above the 50-day moving average.
I don't stop there. To get more confirmation that these stocks are climbing, I check out the 20-day and 200-day moving averages. Then I compare - if those moving averages are also moving higher, then that stock is showing me a strong, reliable trend to the upside.
That's exactly what's happening with the three dividend-paying stocks I picked for you - and Frank - today.
Three Dividend-Paying Stocks Going Higher
The first stock on our list is Pfizer Inc. (NYSE: PFE).
Pfizer is trading above its 200-day moving average, and the 50-day moving average is rolling over - meaning it's moving above the 200-day.
It makes sense, as pharma companies are hot right now. It's been a leading sector in the race for a coronavirus vaccine. The investment focus will be on pharma for a while, which puts Pfizer in a great spot. It also yields 4% at its current price of $38.23 at the time of writing.
The second dividend stock to buy today: Olin Corp. (NYSE: OLN).
Olin is a chemical manufacturer. Right now, it has a juicy 5% yield - compare that to the average S&P 500 company, which pays 2% to 3%. It's broken above its 50-day and is about to break above the 200-day.
The third company on our list: Target Corp. (NYSE: TGT).
Every day, someone asks me about Target. It's been one of the retailers that's kept incredibly busy during the pandemic, offering food and cleaning supplies that we can't get enough of right now. That's going to keep Target strong.
Its yield is 2.4%, and at $112, the stock's 50-day moving average is flashing a bullish signal to me.
I think TGT will head toward $125 and keep going. It's a great hold for growth and income today.
And in the meantime, don't forget to check out my latest webinar...
You see, I have a better than 83% win rate on closed trades that I've recommended since March 27 with an average profit per trade of 41% in six days. Folks, that includes the losing trades.
And if you kept that up for just 12 more days... you could have turned $475 into more than $1,300. Up the ante - and a $2,500 grubstake could have transformed into $39,000 - or more.
About the Author
Chris Johnson is a highly regarded equity and options analyst who has spent much of his nearly 30-year market career designing and interpreting complex models to help investment firms transform millions of data points into impressive gains for clients.
At heart Chris is a quant - like the "rocket scientists" of investing - with a specialty in applying advanced mathematics like stochastic calculus, linear algebra, differential equations, and statistics to Wall Street's data-rich environment.
He began building his proprietary models in 1998, analyzing about 2,000 records per day. Today, that database, which Chris designed and coded from scratch, analyzes a staggering 700,000 records per day. It's the secret behind his track record.
Chris holds degrees in finance, statistics, and accounting. He worked as a licensed broker for 11 years before taking on the role of Director of Quantitative Analysis at a big-name equity and options research firm for eight years. He recently served as Director of Research of a Cleveland-based investment firm responsible for hundreds of millions in AUM. He is also the Founder/CIO of ETF Advisory Research Partners since 2007, noted for its groundbreaking work in Behavioral Valuation systems. Their research is widely read by leaders in the RIA business.
Chris is ranked in the top 99.3% of financial bloggers and top 98.6% of overall experts by TipRanks, the track record registry of financial analysts dating back to January 2009.
He is a frequent commentator on financial markets for CNBC, Fox, Bloomberg TV, and CBS Radio and has been featured in Barron's, USA Today, Newsweek, and The Wall Street Journal, and numerous books.
Today, Chris is the editor of Night Trader and Penny Hawk. He also contributes to Money Morning as the Quant Analysis Specialist.