The stock market has been on a record-setting run. The historic success of the stock market has not blessed every industry or every company. Yet even in the industries which have not cashed in on this bull run, there are companies which have found the formula for success and been able to produce top performing "hot stocks". In sectors such as technology, health care and travel which have not been able to keep pace with the market and have lagged behind, there are still hot stocks in the companies that have been able to shine.

In real estate, an agent will advise you to buy the worst house in the best neighborhood, not the best house in the worst neighborhood. Well, your broker's best stock market investing advice may tell you exactly the opposite. Although care should be taken since these stocks don’t have the protection of an advancing sector, you might still be advised to buy one of these top performing hot stocks:

ValueClick
While the overall performance of the Internet sector has been choppy at best; one of the better hot stocks is ValueClick. This company is one of the largest Internet “ad-networks”; it is a company that connects marketers with web sites where they can advertise. This company stands to gain from recent acquisitions and has one of the best diversified online marketing services, according to some experts. Such a company looks to be a top performing stock and could become an excellent purchase for successful traders.

Alaska Air
With the traditional high operating costs labor struggles have plagued the airline industry; Alaska Air has been able to fly out of the post-9/11 downturn of the airline industry. Plunging gas prices have provided some relief for airlines recently, but the industry has a way to go before catching up to the bull market. In this tough climate, Alaska Air (ALK), parent of Alaska Airlines and short-hop carrier Horizon Air, has outperformed many larger peers, climbing more than 100% since October, 2001, after the industry-wide, post-September 11 nosedive. This hot stock has been able to outperform many of its larger competitors such as United Airlines and Southwest Airlines, earning a buy rating from S&P, who thinks Alaska Air, will outperform many of its competitors. As fuel costs remain steady or even drop, it is possible that this airline will not only be a top stock performer, but will be profitable for those who make money investing in stock.

Stryker
Another hot stock is in the health-care equipment company Stryker. This manufacturer of orthopedic implants is the medical equipment company with a “strong buy” rating from S&P. With margins increasing, it is likely that Stryker will be able to sustain double-digit earnings through 2008. Such a top performing stock can in turn be very profitable for those who practice stock trading.

Barrick Gold
Gold, typically a solid investment for successful traders, may have even safer investment options within due to the top performing stock of Barrick Gold. As gold prices have continued to rise, Barrick's has continued to grow through acquisitions, becoming the world’s largest gold-mining company. This company has a strong history of controlling costs and is a leader in quality and money management as well.

Like gold in the mines of Barrick, these top performing "hot stocks" are valuable nuggets among the stock market movers. Finding hot stocks such as these converts the "prospector" into a successful trader.

Market Direction: The strength coming back into the markets late Friday afternoon, after they had traded lower most of the day, created a bullish signal. Both the Dow and the NASDAQ formed Hammer type signals. The Hammer signals, forming when the stochastics were starting to curl back up, was significant. Having both indexes closing very close to the 20 day moving average while forming a Hammer type signal was even more significant. Candlestick analysis involves evaluating what the signals are doing at important technical levels.

What becomes the total analysis of the Dow over the past five days a trading? We have seen a morning star signal formation at the 20 day moving average. Stochastics started curling back up. The following two days were indecision days, a Doji and a Hammer signal. Those days were followed by a Bullish Engulfing signal. What should the evaluation of the trend be at this point? Are we seeing candlestick buy signals at a potential support area? If it can be anticipated that the uptrend is still in progress, where becomes the next potential target? Either a test of the recent highs or a test of the upper trend line.

If it can be analyzed that the uptrend is still in progress, taking advantage of high profit patterns is easier to exploit. The combination of knowing what the signals represent and how they apply to high profit patterns makes for easy price trend analysis. The ALTH chart is a good example. The longer the overall markets do not appear to be altering their current trend, analyzing for high profit patterns becomes easier. The ALTH chart revealed a Jay hook pattern starting to form. This makes for a low risk, high profit potential trade. What did the Bullish Harami reveal? That the selling had stopped! What did the gap up in price following the Harami reveal? Not only did the selling stop, but the Bulls were stepping back into the trade with enthusiasm.

ALTH

Recognizing what forms a Jay hook pattern allows an investor to take advantage of the next high probability/high profit trade. What provided the alert for a potential Jay hook pattern? A very strong price move prior to the pullback. Knowing that information is what potentially forms the Jay hook pattern allows the candlestick investor to watch for the signals that would start confirming that pattern. Buying into the position at the opportune time has produced a 17% profit with the potential still going higher.

Keep in mind, this is not difficult analysis. Price patterns occur in all price trends. Being able to exploit those patterns it is made much easier when utilizing the information incorporated into candlestick signals. Profitable investing comes from recognizing indicators that have produced profits in the past. Whether those indicators are fundamental in nature or technical in nature does not matter. Fundamental analysis is derived from analyzing factors that have improved prices in the past. Technical analysis involves analyzing patterns that have produced high probability/high profit situations in the past. Think of how our investment returns and our investment knowledge would have been refined through the years had we learned how to recognize high profit signals and patterns at the early stages of our investment career. The Candlestick Forum highly recommends teaching your children and your friends how to invest correctly. Mr. Bigalow's two books," Profitable Candlestick Trading" and "High Profit Candlestick Patterns" reveal easy-to-understand insights into investment practices. Take advantage of the Three Pack Holiday specials found on the site this month. Not only have the prices been discounted for the holiday season, the Candlestick Forum will provide shipping for free in the domestic United States.

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Good investing,

The Candlestick Forum Staff