Hello there. Welcome back to Cantos Charts. I'm Steven Mayne from Falcon Securities. Today we'll be looking at some stocks to watch throughout 2010.

To start with we're going to be looking at United Utilities, a solid stock really to have in any long-term portfolio. We're looking at the weekly graphs when we're looking at a long-term hold here. With the daily charts, we'll get too many fluctuations in the short-term. Looking at the weekly charts when we're looking at holding something for 12 months, it gives you a much better perspective of really where the stock should be going.

So when you look at United Utilities we can see that a strong support has been found here throughout these lows. It has actually been tested approximately three times. We can see that actually these lows were formed on positive divergence on the RSI there and on the MACD and finally, we've actually broken above the 200 Simple Moving Average. The first time we've done that, as you can see on the graph, effectively all year.

Just a point of caution, though. We notice the Stochastic which is very heavily over-bought, so for people who are looking actually to buy United Utilities, it might not be a bad idea really just to hold off for a couple of weeks. Hopefully the stock should actually fall down, not break this low giving an excellent opportunity to buy into the stock with a very sensible risk reward.

Just to summarise, recent moves up start forming an uptrend which is jolly good. Obviously that gives us the indication that the stock is going to move higher. We've got possible positive divergence on the RSI and the MACD, again indicating that the next general move will be higher for this company.

But just a little word of caution, just really getting your timing correct whilst buying into the stock is that Stochastic is very over-bought. Therefore, we should really expect a little pull back here on United Utilities before we get the next impulse move upwards. So don't obviously go out and start buying it straight away, just wait a week or two, let that Stochastic unwind back to oversold and then really start buying in. You'll have a much better risk reward then on the stock moving forward.

Moving on, another stock really to look at moving up is Smiths. This stock actually we found does has a lot of resistance here. This is just the 200 Simple Moving Average. Again, you'll get this on any basic charting package. We can see this all the way through. They've actually now broken above this. We have a nice positively trending RSI and also a nice positively trending MACD and the Stochastic here has turned up.

Obviously, depending on the way the market moves, there are possible pull-backs for any of these stocks, but as we're looking at a 12-month timeframe, we should be okay. We should really expect the stock to move up nicely over 2010. For any of you cautious traders it may come back and retest this moving average, but we do assume for the course of next year the stock should remain moving higher.

Just to summarise, strong price action, obviously a very clear uptrend from the graph we've just previously seen and we have a buy signal on the Stochastic, we have a nice uptrending move on the MACD and the RSI as well.

Thank you very much for watching CantosCharts. I wish you the best in your investing in 2010.