This column was originally published on RealMoney on Feb. 7 at 11:10 a.m. EST. It's being republished as a bonus for TheStreet.com readers.

It's a tough market, but there are still hundreds of stocks going up every day.

I use a proprietary scan to uncover market leaders, and I post them on a customized watch list.

Today I'll highlight the eight strongest members of this elite group so readers can fill their own lists with the best equities the market has to offer this month.

Many of these stocks are tough to buy right now because they are overextended after powerful rallies. The best approach is put them on your list and wait to buy until they pull back to support.

Precious metals are hitting multiyear highs, and North American Palladium ( PAL) is a major beneficiary of this powerful uptrend. The stock is trading at a two-year high, but it's quickly approaching longer-term resistance at $14.52.

The best trade on this one will come on a quick pullback to strong support above $9.

Anadigics ( ANAD) has doubled over the last two months, but it still shows good upside. It started to pull back after reporting earnings Monday, but it should bounce soon. An entry at rising channel support near $5.80 would offer a low-risk position for a rally to key resistance over $9. Make sure to keep a stop-loss below the channel, just in case it breaks.

Rediff.com ( REDF) is a momentum favorite that Jim Cramer spotlighted on Mad Money in late January. The stock reported solid earnings after that and has continued its vertical rise. You'll need a very strong stomach to play this volatile stock -- it's best left to market gunslingers and hard-core scalpers.

Six Flags ( PKS) has been the subject of constant takeover rumors this winter. The chatter has lifted the amusement park operator to a three-year-year high, even though most of its operations are shut down for the season. While the chart shows upside to $15, the downside goes all the way to that $9.50 gap. I wouldn't touch this one until there's a deep pullback.





Bally Total Fitness ( BFT) has been moving higher since a concerted attack by large shareholders triggered major reforms at the company. The smoke is clearing, and speculation on better results could keep the rally going for a long time. The chart shows excellent support at $7.50 and upside just above $10. Buying a small pullback here makes perfect sense.

Vaalco Energy ( EGY - Get Report) is an oil exploration company with operations in Texas and Africa. It broke out above long-term resistance two weeks ago and is trading at an all-time high. Its powerful rally looks stretched, so I wouldn't recommend taking a position here. Instead, let it consolidate its gains while you keep one eye on the crude oil market.

Dress Barn ( DBRN) is a top performer in the struggling retail sector. Its casual apparel is extremely popular these days, and the company has exceeded same-store sales estimates for the last four months in a row. The good news is that this stock is starting to pull back -- channel support below $43 should offer an excellent entry point.

Illumina ( ILMN - Get Report) is the strongest biotech stock on my watch list. The company provides tools for genetic research. It's trading at a five-year high but has moved into a zone of strong resistance. It has substantial upside, but it needs to consolidate its gains by dropping into the upper teens for a while before charging through the mid-$20s.

Please note that due to factors including low market capitalization and/or insufficient public float, we consider Anadigics, Bally Total Fitness and Vaalco to be small-cap stocks. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

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Alan Farley is a professional trader and author of The Master Swing Trader. Farley also runs a Web site called HardRightEdge.com, an online resource for trading education, technical analysis and short-term investment strategies. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Farley appreciates your feedback; click here to send him an email. Also, click here to sign up for Farley's premium subscription product The Daily Swing Trade brought to you exclusively by TheStreet.com.

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