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Buy Or Sell: Green Stocks In A Red Market

|Includes: KO, PEP, SINA, SodaStream International (SODA), SOHU

As the markets continue to tumble, a few green stocks show clearly on the radar. Stocks higher on a day like today show impressive strength. The question becomes, do investors sell these stocks into strength or hold them for further gains.

The first part of the answer is to analyze whether or not the markets will head higher or lower from here. As long as the pivot low from last Tuesday holds on the S&P 500, smart investors believe the market could be just pulling back today on renewed fear. That leads Wall Street big players to look to hold the strong stocks for further gains.

The charts of the individual stocks must be analyzed as the next step. The first stock to look at is Sodastream International Limited (NASDAQ:SODA). It is trading at $39.58, +0.78 (+2.01%). The key to this stock is the drop from the 52 week high of $79.72 in the last few weeks. That is an ugly fall and a technical bounce is partially the reason for the up move today. This portion is a neutral as a technical oversold bounce can fade. The positive factor is the bottoming tail on the chart yesterday. A bottoming tail signals a reversal in trend and may cause further upside. With the compilation of possible upside in the stock market from these levels and the bottoming tail, this stock could see another 10% bounce or more in the short term.

SINA Corporation (NASDAQ:SINA) is sharply higher today, trading at $99.17, +6.27(+6.75%). The company reported earnings that were better than Wall Street estimates. This is company specific news and may fade after a day or two of upside. While the S&P 500 still holds the lows, questions on the technical chart pop up. There is a down sloping trend line from the highs of SINA earlier this year. The current price is still below that level. Any significant bounce in the markets should see SINA pop back into that trend line. However, that trend line is a sell signal once hit.

Gareth Soloway