So smoke ‘em while you got ‘em because $80 is rarified air.

The stock has pretty good support in the mid-70's on a fundamental basis, however. So it is not a candidate to sell " just not to chase higher.

This morning, Altria Group (the smokes are about 75 pct of profits and the Kraft/Nabisco foods are most of the rest) reported a better than expected quarter. But then, back on July 6, there was a huge price and volume increase, so the stock is already expensive at $79.49.

You'll note that the RSI 7 on the Monthly data chart is a very elevated 77.2. That's not to say the Relative Strength Index for MO won't exceed 80, but you know my feelings on that. I would never chase a stock that carried a Monthly RSI above 70 unless -- (operative word) perhaps -- the broad market had just bottomed out of a long-term Bear phase.

For 2007, estimated earnings of $6.40 times a PE multiple of 12 equals a price of say $77. A $7.50 cash flow times a long-term (historical) average ten times multiple would result in $75. So, I feel comfortable with Altria in the upper 70's, but not into the 80's where it may trade.

Besides, the 80 cent dividend is likely to be paid out once more in the next four quarters, followed by say $0.86 per quarter. So the expected $3.38 dividend at a current $79.49 share price results in a nice 4.25 dividend yield.

But a price into the 80's takes the yield down below 4 pct and since high dividends and share buy-backs is the name of the game at Altria, I think trader-smokers will start to choke on the thin air.

Altria is a fairly decent defensive play for traders who have a need to stay in the Big Caps and out-perform their peers in a Bear market. That's the best I can say at this point in time.

Altria Group, Inc. [GICS 30, Dow 30]
(MO: Yahoo Finance file)
(MO: StockChart chart)
(MO: Investertech chart)
(MO: ADVFN Financial Data)
(MO: ADVFN Financial Data)
(MO: Value Line Report May 5: next one is due Aug. 4)

p.s., California has experienced huge heat problems in the past couple days. A power outage shut down the Internet service to Investertech, which is located in Orange County (L.A.). But over ten years, Investertech has been a reliable service, and I am trying to develop a joint venture or business arrangement with them.