British American Tobacco

The last year was a strong one for shares of British American Tobacco ( BTI). This international tobacco stock has seen its value climb more than 13% in the trailing 12 months, in addition to the hefty 4.6% dividend yield being enjoyed by shareholders. But for traders hoping to catch a ride on BTI's momentum, I'd suggest hanging on.

That's because BTI is right on the verge of being overextended right now. Shares broke above resistance last month, signaling a buy signal to traders, but since then, the stock hasn't had a chance to cool off and absorb that overbought momentum. If you're interested in becoming a buyer of BTI, wait for a retest of some form of support first.

A return to $77 -- followed by a bounce higher -- would be a good buying opportunity for long-side investors. Barring that, wait for a bit of sideways consolidation before adding on shares. BTI needs to form a base right now.

BTI is one of the highest-yielding tobacco stocks, as well as one of TheStreet Ratings' top-rated tobacco stocks.

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