For many people, tax day isn’t so much a payout as it is a payback. A payback from the government, that is. Unfortunately, it’s money that we never owed in the first place, but we tend to overlook that and think of it as a fresh inflow of cash.
Given that, the question is what to do with it? I’m always asked if one should invest in the market, and my answer is always “yes,” but with one caveat. Invest only if you think you can show a decent return. And in my mind, you can only show a decent return if a) the stock is near an important low and has nearby support or b) the stock is breaking to a new high. The former I will discuss on "Bulls & Bears" on April 16th. The latter I’ll show you today.
The “stock” I listed on my chart in the box above and to the right (click on the small image to see the whole chart) is really an ETF, which is shorthand for Exchange Traded Fund. You can think of it as a mutual fund traded on the AMEX. In this case, the ETF represents the utility industry and is the only one of 176 ETFs I could find that was making a new high.
Given that, this is the only “breakout” I’d play. I think you can buy now, but make sure to put a stop under the recent breakout bar!
This weekend our Business Block has much more on what to do with your tax return. Tune in Saturday 10am - noon ET.
Gary B. Smith, "The Chartman," is a contributing editor for RealMoney.com and a regular commentator on "Bulls & Bears."
Gary B. Smith joined FOX News Channel in 1999 and is currently a regular commentator on "Bulls & Bears," including his own segment called, "The Chartman."