WMI - Waste Management $29.12 +0.62 (+0.68)

Tuesday's Comment:

WMI did a tremendous about face on Tuesday, as shares plummeted in the early going only to turn on a dime and close higher for the day. WMI dipped as low as $27.38 before reversing course at about midday. We were encouraged by the fact that the big block trades occurred as the stock was heading higher in the afternoon instead of when the stock was selling off in the morning. Tuesday's action in WMI might have been the "cleansing" before the next leg higher for the stock. Any weak shareholders probably pulled the ripcord today, leaving only strong holders that will probably not turn into sellers until much higher prices present themselves. Those who might be thinking about adding WMI to their portfolios could look to do so on a break through resistance at $29 on volume of at least 2.5 million shares for the session.

Wednesday's Update:

Waste Management stayed out of the garbage heap on Wednesday, despite selling pressure from the broader market. In fact, WMI managed to breach resistance at $29 on outstanding volume of 4.8 million shares, more than twice its average trade. This tells us that momentum players and institutions are scooping up shares of our pollution control play. We are also encouraged by the fact that other pollution control stocks are making new highs. This means that this whole sector has become attractive, and with WMI the clear leader of the group, we think it has more upside potential. No substantial resistance should show up until the $31.25 level, and even that shouldn't pose too much of a problem since it was established last July. We also like the fact that WMI's MACD just issued a buy signal and that volume has clearly been coming in when the stock has been advancing. Traders that might be interested in adding WMI to their portfolios could look to do so as long as WMI can close above $29 again on Thursday, accompanied by volume of at least 2.5 million shares.

Picked on June 6th @ $28.51 Change Since Picked +0.61 Stop Loss @ $26.90

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