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There are many different ways to define what a “value bet” is in poker, but just imagine that you are playing in a hand and all of the cards have been dealt. You are reasonably sure that you have the best hand, and if you won it right here right now, you would be happy taking the money that is already in the pot. You have the option of making one more bet, or you can simply “check,” and see if your opponents check as well, so that you can have a cheap showdown and see who really won the hand. So long as you believe your hand will win more times than not in this specific situation (positive expectation), the correct play is to go ahead and bet. If you are a wild and overly aggressive player, then you will necessarily be “value betting” when it is correct to do so, even though you will make plenty of other mistakes to offset the proper betting.

However, by far the most difficult challenge for disciplined gamblers is leaving money on the table. In other words, if you determine through your analysis that there is a reasonable chance that you have the best hand, then you should almost never miss a bet. There is a crucial difference between being a patient and conservative trader, versus being passive and not extracting as much money from, say, Mr. Market as you should. There are times when you are going to have to push yourself to maximize profits without becoming greedy and losing your discipline. This often means taking profits in extended stocks and rotating that capital over to others that are not.

Recently, the broad market has broken out and is short-term extended. While there is a plethora of charts that need to consolidate, there are also quite a few that have set up behind them. The easiest strategy would be to turn cautious on everything and declare nothing to be buyable at these levels. Instead of taking that route, I am sticking with my stock picker’s market thesis. Therefore, it follows that some names will still be actionable even after the run that we have seen.

Below, you will find ten specific stock ideas that, in this situation, represent the closest thing to making “value bets”  that the stock market has to offer.

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Consider yourself lucky and blessed if you have not dealt with a scumbag car salesman in your life. WIth that said, many of the car dealership stocks are either set up well or have already broken out and should be monitored for secondary entry points after consolidating. In addition to the names I present below with annotated daily charts, keep an eye on LAD PAG SAH.

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[youtube:http://www.youtube.com/watch?v=VbQWO22pprk 550 412]

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Politics aside, if you take a look at the daily charts of AET CI CVH MGLN WLP, you will see a multitude of high volume breakouts over the past several days. Indeed, the healthcare stocks as a whole are attracting serious buyers of size at this juncture. Below, you will find the annotated daily charts of other healthcare stocks that are setting up properly behind the now extended leaders.

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[youtube:http://www.youtube.com/watch?v=c6j8EiWIVZs 550 412] ________________

How gangster is that song?

While the cool thing to do may be to wear a beret and head down to my local coffee shop, where I can be that guy, loudly explaining to everyone within earshot how the world is so wrong to have killed the book publishing industry, the stocks of two prominent publishers are in clear uptrends and far from dead. Indeed, it is game on for the Reading Rainbow trade. Take notice.

See their weekly charts below.

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Josh Brown (@ReformedBroker) has conviction in his natural gas thesis now more than ever. He wrote this piece earlier in the month, cogently articulating his thoughts as to why the abundant fuel will play a more prominent role in the near future. Recently, he more than held his own with the estimable Jeff Macke in a Yahoo! Finance video on the subject matter. Click here to see that.

Looking at some of those plays, the technicals line up smartly with Josh’s thesis.

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While it remains to be seen if the after-hours carnage in AKAM spills over to the names seen below, the following charts of cloud and cloud-related names look as set up as any other area of the market at this point. Thus, they compel you to keep them on your watchlists, looking for entries on strength.

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