Thursday, May 10, 2007

Long-term pick: AOS

AOS monthly chart

A. O. Smith Corporation engages in the manufacture and sale of water heating equipment and electric motors to residential, commercial, and industrial markets principally in the United States. It operates in two segments, Water Products and Electrical Products. The Water Products segment manufactures and markets a line of residential gas and electric water heaters, commercial water heating equipment, copper-tube boilers, and water systems tanks. The Electrical Products segment produces hermetic motors, fractional horsepower alternating current (AC) and direct current (DC) motors, and integral horsepower motors. It also operates in Mexico, the People�s Republic of China, Canada, and internationally. The company sells its water heater products to plumbing wholesalers and retail outlets, and electric motor products to original equipment manufacturers and distributors. A. O. Smith Corporation was founded in 1874 and is headquartered in Milwaukee, Wisconsin.

I like this stock as a long term play. Look how it broke out of a 10 year base. It has tested it's breakout level of 35 and held.

Disclosure: I have no positions in AOS right now.

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About Me

I have been trading for 5 years. It took close to a year before I became profitable. I find that I am improving gradually each year. My method of choice is scalping. My edge lies in tape reading NYSE stocks and staying on the side of the specialist. That is the method I learned when I started. As I build up my capital I will try new styles and trade new markets. In late 2006 my trading hit a rough patch after the introduction of the NYSE Hybrid system. For most of 2007, I have been on a search for new strategies that would help me adapt to the market.