12 Strong Technical Stocks for 2012

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( TheStreet) -- The end of the year creates opportunities for market prognosticators to forecast markets, and create lists of stocks. One such list is Barron's "Favorite Stocks for Year Ahead." This list usually has fundamentally good ideas, but some technical screening can certainly help screen it further. So, we will examine this list to see what "tickles our fancy" on an intermediate-term basis. We will use weekly charts for our analysis.
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The first stock is Berkshire Hathaway ( BRKA), which is a bit more expensive than most of the readers of this column normally buy. The stock has held support in the 10,000 area and has technical objectives in the 125000 area. Moving averages are positive, but the stochastic is elevated, and this is a neutral to positive picture.

The second stock is Comcast ( CMCSA), a good bit cheaper, and also a bit more attractive. Moving averages are positive, and the stochastic has a pattern of higher lows and is trending up. This stock has objectives in the 26.20 area and seems buyable here.

The next stock is Daimler AG ( DDAIF), a European name. While the stock has held support in the 40 area the trend is not as clear, and in addition there could be headwinds if the European economy slows. Our favorite way to invest in Europe is iShare MSCI Sweden ETF ( EWD) and we would choose this over DDAIF. Notice the higher lows on EWD, while it has the same overall pattern. Sweden should advance if Europe trades up, but there is some downside protection in the event that Europe slows more than expected.

The next stock on the list is Freeport-McMoran Copper and Gold ( FCX). This stock has negative moving averages and has traded weaker than gold over the last few months. On balance, we would wait on this name, at least until the moving averages cross over to the positive side.

Metlife ( MET), a financial, is next. In the FRED Report, we remain underweight financials but do have some names we prefer to MET. We would prefer American Express ( AXP), and Discover Financial ( DFS), both of which are more attractive. We note there has been some takeover banter around DFS, and the stock may be doing well because of this -- so DFS has above-average risk -- buyers beware. AXP has performed better and is a Dow 30 component. We like big blue chips for now, as European investors generally buy these stocks when they come into our markets (and this has been one of our themes for 2011).

Procter and Gamble ( PG) is next, and we like this name. This is a solid chart and a good big cap Dow 30 name as well. Royal Dutch Shell ( RDSA) is Barron's next choice and we like the chart -- and energy is an overweight for us currently.

Sanofi ADS ( SNY) is a drug but is also European, and while this name could do well and we would consider purchase, we like American names such as Eli Lilly ( LLY) better. We would also include a bit of iShares DJ Pharmaceuticals ( IHE) as it is hitting new highs and is a way to invest in a sector that should outperform next year.

Seagate Technology ( STX), has positive moving averages, but the stochastic pattern is a little bit negative and we would avoid the name. On the other hand, Vodafone ( VOD) is an attractive chart in a defensive sector and may be a way to have some European exposure that will outperform if Europe trades badly next year.

We hope this helps for putting together some ideas for 2012. Expect to see our thoughts on what we can expect in 2012 in the weeks ahead.



Fred Meissner is founder and publisher of The Fred Report. Fred is a CMT and past President of the Market Technicians Association (MTA). He recently left Merrill Lynch's Market Analysis Department and Sector Strategy Department to form The Fred Report.�A detailed bio is here:Fred Meissner.