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Commodity stocks have been (and remain) the leaders of the market’s advance, but interestingly, the tech-heavy Nasdaq has been outperforming all other major indexes for the past few weeks. Now, finally, some individual tech stocks are beginning to pop up—there are two chip stocks and one hard disk drive maker in this week’s Top Ten. We’re not ready to tell you to move a ton of money into technology sectors, but it’s a sign the rally is broadening out. Elsewhere in this week’s list, there are the usual suspects of oil, natural gas, steel and alternative energy. Our favorite of the week is Marvell Technology (MRVL), a chip firm that gapped up in a big way after its earnings announcement last Friday. We think you could nibble around here, although a drop of a point or two isn’t out of the question.

Stock Name	Price	Buy Range	Loss Limit
AMSC (AMSC)	0.00	30-33	-
CMI (CMI)	0.00	67-71	-
EAC (EAC)	0.00	65-70	-
GTI (GTI)	0.00	24-26	-
HK (HK)	0.00	27-29	-
MA (MA)	0.00	295-305	-
MRVL (MRVL)	0.00	15-17	-
NETL (NETL)	0.00	34-36	-
PCX (PCX)	0.00	100-110	-
WDC (WDC)	0.00	34-36	-

Overall, we continue to see many signs that the market is transitioning from a bear phase to a bullish phase—sentiment is horrid, stocks have refused to break down on the worst of news (i.e., Bear Stearns) and the indexes have held above support for many weeks. However, when it comes to buying individual stocks, there are few options—steel and some oil stocks remain in favor, but for every stock that pops its head up, there seems to be another that gets slapped down. Bottom line, it’s still not a time for aggressive buying, but picking up a few shares of potential leaders during pullbacks can still work out. Just don’t go overboard! This week’s Top Ten is commodity-heavy, with a few growth-oriented names sprinkled in. Our favorite of the week is Comstock Resources (CRK), which staged a good-looking breakout last week. We think you can pick up a few shares on weakness.

Stock Name	Price	Buy Range	Loss Limit
CLF (CLF)	0.00	110-125	-
CLR (CLR)	0.00	29-33	-
CRK (CRK)	0.00	35-39	-
ILMN (ILMN)	0.00	68-74	-
MT (MT)	0.00	79-83	-
OI (OI)	0.00	53-56	-
PQ (PQ)	0.00	15-17	-
RIMM (RIMM)	0.00	130-140	-
STLD (STLD)	0.00	31 1/2 - 34 1/2	-
TNE (TNE)	0.00	21-25	-

The broad market remains (ahem) challenging, but there are still broad pockets of strength, and if you care to mine them (we have mining on our minds, for obvious reasons), and you watch your stocks carefully, you can still make money in this market. Coal, oil and fertilizer remain strong, but we’re now seeing more action in stocks of supporting industries, like the companies that help the drillers, or the companies that sell and service the tractors that roam the fields. This extension of strength into supporting industries is normal; we well remember when layers of technology stocks went through the process in the 80s and 90s. So don’t fear it and don’t fight it; embrace it and prosper. Our Editor’s Choice in this issue is one of these stocks, Titan Machinery. Making its first appearance in Cabot Top Ten Report, and hopefully not its last, it boasts good management, a great industry rolling in cash, and excellent expansion opportunities. Plus, it’s a young stock, and the buyers are in total control.

Stock Name	Price	Buy Range	Loss Limit
AGU (AGU)	0.00	96-102	-
AUXL (AUXL)	0.00	33-36	-
BUCY (BUCY)	0.00	69-73	-
CPX (CPX)	0.00	29-31	-
CRM (CRM)	0.00	69-74	-
GDP (GDP)	0.00	52-57	-
MOS (MOS)	0.00	143-150	-
ROST (ROST)	0.00	31-36	-
STLD (STLD)	0.00	36-40	-
TITN (TITN)	0.00	30-32	-

The meat of earnings season is upon us—many blue-chip firms have already reported, but the fast-growing, emerging leaders are just starting to release numbers. Remember that big earnings gaps up (10% or more) generally lead to further gains in the weeks ahead (with normal pullbacks, of course), and vice versa. So it shouldn’t be a surprise to see a few recent earnings winners in this week’s Top Ten; a couple of them are likely to be big winners should the market continue to trend higher. Overall, we remain optimistic the market’s best days are ahead, but there’s no rush—things are still falling into place, supporting further gains in the weeks to come. Our favorite of this week is Fording Canadian Coal (FDG), a stock that’s been featured a few times in Top Ten, thanks to its huge reserves of metallurgical coal. The entire group remains strong, although it has paused somewhat in recent weeks. We think it’s a good time to get on board.

Stock Name	Price	Buy Range	Loss Limit
FRO (FRO)	0.00	51-53	-
GDI (GDI)	0.00	45-48	-
PDE (PDE)	0.00	38-41	-
SOHU (SOHU)	0.00	65-70	-
SOL (SOL)	0.00	16-18	-
SWN (SWN)	0.00	38-42	-
XEC (XEC)	0.00	59-62	-
CLF (CLF)	0.00	150-160	-
DAR (DAR)	0.00	13-15	-
FDG (FDG)	0.00	60-63	-

We knew a correction was on the way, and the market delivered it last week. The major indexes still look fine, but we’re a bit wary of the action of leading stocks—even in recent days when the indexes are up, most leaders are dropping. That doesn’t mean the bull move is over, but as you can see in our Market Monitor above, we’d cool our heels a bit; don’t hesitate to take a few chips off the table, and remember to cut all losses short. As for buying, we believe this week’s list offers many of the top leaders in the market in various sectors. Not all are near good buy points, but any further weakness should bring them there soon. Our favorite of the week is Hercules Offshore (HERO), a shallow-water driller that has recently emerged from a tight consolidation. We do feel that many energy names can pull back, but HERO should pull back less than most.

Stock Name	Price	Buy Range	Loss Limit
ANR (ANR)	0.00	60-66	-
CLF (CLF)	0.00	87-97	-
CLR (CLR)	0.00	53-57	-
ENER (ENER)	0.00	45-54	-
FRO (FRO)	0.00	58-64	-
HERO (HERO)	0.00	32-34	-
MMR (MMR)	0.00	28-32	-
SOHU (SOHU)	0.00	70-76	-
SU (SU)	0.00	66-70	-
X (X)	0.00	160-170	-

Last week was a decisive week, in our view. Not only did the major indexes score solid gains, but many individual leading stocks put on a good show, telling us the bulls are finally joining the party. Of course, with the meat of earnings season still coming up, there are bound to be ups and downs in the weeks ahead. But we’re growing more confident that the bear phase from October of last year through March of this year—punctuated by the collapse of Bear Stearns—is coming to an end. This week’s Top Ten is once again heavy in the commodity areas, which are leading the market higher. We do believe traditional growth stocks will appear if this market is going to run, but for now, the buying is clearly in metals, steels, oil and gas. Our favorite of the week may be a surprise. It’s U.S. Steel (X), a big, old firm, but one that might be best positioned to take advantage of higher steel prices in the months ahead. Try to buy on weakness.

Stock Name	Price	Buy Range	Loss Limit
AGU (AGU)	0.00	75-85	-
BUCY (BUCY)	0.00	117-120	-
EAC (EAC)	0.00	43-46	-
HP (HP)	0.00	51-54	-
MEE (MEE)	0.00	49-53	-
MMR (MMR)	0.00	22-24	-
PXD (PXD)	0.00	53-58	-
SOHU (SOHU)	0.00	50-55	-
WFT (WFT)	0.00	76-82	-
X (X)	0.00	145-155	-