Zacks.com Expert Watch Highlights the Following Stocks: Ceradyne, Accredo Health, and Qualcomm.

CHICAGO -- Technical indicators are not reassuring right now. Discover the signs that demand defensive investing along with top timely trades to continue to generate returns in the midst of this difficult market. Read the full Experts Watch article with commentary and recommendations on Ceradyne (NYSE:CRDN), Accredo Health (NASDAQ:ACDO) and Qualcomm (NASDAQ:QCOM) go to; http://at.zacks.com/?id=101

Here are the highlights from the Experts Watch column:

Stochastics remain in a very oversold position, according to a number of technical analysts, and some recent chart patterns point to a potential reversal. Questions remain, though, as to whether this is merely a short term relief rally that is inevitable after weeks of a trendless decline, or whether the market is finding its legs to create strength in the second half. A number of Experts see the market's trading range since the beginning of the year, combined with the indices positions relative to their respective moving averages as a bearish sign, and they are taking precautions and conservative positions to avoid the damage expected over the next few months.

Dr. Melvin Pasternak, editor of the StreetAuthority Swing Trader, thinks the market may be overdue for a relief rally at present. However, two of the three major averages are now trading below their 150-day and 200-day moving averages. According to Pasternak, the so-called death crosses came when the 50-day moving averages dropped below the 200-day moving averages. On the NASDAQ, the cross occurred several weeks ago, and if the NASDAQ doesn't make significant headway shortly, technology stocks will be under significantly more pressure. In fact, the 200-day moving average on the NASDAQ is already beginning to turn slightly negative.

For Pasternak, companies that are demonstrating impressive relative strength and defying the trends their peers, industry and capitalization alike, are exhibiting are good bets right now. One such company is Ceradyne (NYSE:CRDN). Ceradyne is a manufacturer of diversified products using ceramics including automobile components, orthodontic brackets and lightweight body armor used by soldiers in Iraq. On Thursday, the company announced second quarter earnings of 40 cents, 9 cents ahead of expectations. Revenues were up 77% from the year-ago second quarter. CRDN is unusual in this stage III market in that the chart is still in a clean stage II advance, advancing nicely above an upward sloping 150-day moving average.

Given his view of market weakness, Pasternak is also taking short positions. Accredo Health (NASDAQ:ACDO) provides specialty retail pharmacy services servicing patients who require injectable biotech drugs. Between April 2003 and April 2004 the stock moved from a low near $10 to a high near $40, providing nearly a four-bagger for shareholders. Like many stocks, ACDO appears to be topping and is entering stage III.

The same cross formation was put in places on the Dow Jones Industrial average, and there is danger that it will occur on the S&P 500. The Dow's down pattern can only be broken in a move above 10,180; the 10,000 level is psychologically important, but that is the extent of its significance. Gregory Spear, editor of The Spear Report: Professional Edition has a trading target on the Dow Jones industrial Average of 9,700.

Qualcomm (NASDAQ:QCOM) makes a specialized (CDMA) communication chip for wireless phones and QCOM licenses that technology. Back in February, QCOM raised earnings guidance by 30%. The stock gapped up a few dollars, and despite the weak market for technology in general, and despite the weakness in the stocks of other telecommunications competitors, Spear expects the stock to continue to resist selling. Qualcomm is cash rich with $7 billion in the coffers, has nominal long-term debt and sports a small dividend to boot. After reporting earnings this week, the company raised guidance again for its fiscal 2004 revenue to an astounding 33%-35% growth rate, and expects profits to surge 50%.

Read the full report with insight from the experts at Zacks.com: http://at.zacks.com/?id=102

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