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Top Dog

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Last Thursday, we wrote up the "Dog of the Dow" strategy that investors use to outperform the market in a short-term timeframe. Based on our "Dog of the Dow" strategy, we came up with SBC Communications (SBC), (as the second lowest priced). What we wanted to see ideally was for shares of SBC to pullback to the low $40's in the near future. It's yet to happen as the stock bounced higher. Currently, shares of SBC are trading above a long-term ascending support line and both the 50-week and 200- week MA's.

SBC Communications chart - weekly interval, last four years.

Our upward trends are still in place and Long-term resistance is still at $60. We feel there might yet to be a pullback in shares of SBC to the $40's, as MACD has rolled over and nearing the zero line. Although our "Dog of the Dow" strategy has not happened, today shares of SBC are up 4.71%. Hmmm, maybe it's the (lower equipment costs boosting the bottom line for telecom stocks) that can explain the hefty percentage gain in SBC today.

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