Smoke Em – Cigarette Stocks are Lighting It Up Again
- Posted by Greg Harmon
- on May 28th, 2013
Cigarette stocks have been moving up in the short run. They have long been part of the dividend movement that many talking heads have been discussing as a replacement for bond yields. And with the talk turning toward when Quantitative Easing will end you would think it tome for them to start peaking. But a look at their long term, monthly charts suggest anything but that. Take a look.
Lorillard, $LO, shows that trend higher since 2009. The recent pullback to the 20 month Simple Moving Average (SMA) has led to a bounce and approach of new highs. The Relative Strength Index (RSI) is rising and bullish and the Moving Average Convergence Divergence indicator (MACD) is turning up after a pullback. This points higher with a Measured Move to 46.
Altria, $MO, shows a similar trend higher off of the 2009 lows. It did not make it quite back to the 20 month SMA but has a better potential via a Measured Move higher to 43.25 and it is already clear of resistance. The RSI and MACD are bullish to support it higher.
Reynolds American, $RAI
Reynolds American, $RAI, follows the pattern as well. It as support from a rising RSI and MACD and is heading towards a Measured Move higher at 54. Each one of these stocks has at least a 4.70% dividend yield to keep you busy as it rises.
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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