Thanks to his dancing skills, 15-year-old Henry Chang is about to buy his very first stock.

In a recent e-mail message, the would-be Gene Kelly wrote: “For coming in first in my high school dance contest, my dad said he would buy me 200 shares of a single stock that I have to choose on my own from the 30 companies that make up the Dow Jones Industrial Average. I am checking around with different people for ideas and my mom thought I should e-mail you. This will be my very first stock purchase, so please do right by me by picking something that will go up. If I buy the stock you recommend and you do very well by me, I will take you to the best restaurant in Chinatown, my aunt’s house.”

Henry’s e-mail was among two I recently received seeking investment recommendations, which I personally never make. Another reader asked me for my favorite short sales (a bet the prices of the stocks would fall).

To give Henry a helping hand, I rang up a perceptive, savvy analyst at the Dow Theory Forecasts newsletter, Charles Carlson, who doggedly tracks the Dow Industrials and has also written a book about them, “Winning With the Dow’s Losers.” In the course of our chat, he laid out what he considers the best and worst of the Dow stocks.

No guarantees, Henry, but Mr. Carlson’s top Dow pick is a high-tech equipment maker, Hewlett-Packard, which he describes as “unduly beaten-down and undervalued.” Citing solid fundamentals, he notes that the company has topped Wall Street’s earnings estimates in each of its past four quarters, and he sees more of the same ahead. He pegs earnings for the current fiscal year ending October 31 at $3.40 a share, up from $2.93 the year before, and he sees another gain of more than $3.80 in fiscal year 2009. Looking 12 months out, he projects about a 20% increase in the stock price.

His runners-up as the most attractive Dow stocks are IBM, Microsoft, Wal-Mart, and Exxon Mobil Corp.

There is a widely held theory known as “dogs of the Dow” that says the worst-performing Dow stocks in any given year, notably those with the highest yields, will rebound the following year and lead the way as that year’s most prolific performers. In 2007, Citigroup and Home Depot were the Dow’s worst dogs. Mr. Carlson expects the two to be among this year’s best Dow performers, telling me, “I would buy both stocks now.” In contrast, it should be noted that bears abound, with both stocks sporting hefty short positions.

A cautionary note: Mr. Carlson doesn’t like the general market. Noting that the Dow Theory — a technical measure for determining the course of stock prices — has turned negative, he tells me, “We’re now in a bear market, and I look for a flat 12 months ahead.” As a result, he is urging the letter’s subscribers to maintain a high cash position in their portfolios — between 20% and 30%.

Which is the worst Dow stock? Mr. Carlson quickly named pharmaceutical giant Pfizer, saying he would shun the company because “it is stuck in the mud.” Although cheap on valuation, he feels Pfizer should remain that way over the next 12 months because of what he sees as the lack of strong earnings, a dearth of blockbuster drugs, increasing generic competition, and Washington’s determination to clamp down on ballooning health care costs. Indicative of the company’s problems, Pfizer recently reported an 18% drop in first-quarter earnings.

Another reader, Salvatore Albano, who has written me before and manages about $2.5 million of his family’s money, is also down on the market. In a fresh e-mail message he writes: “I’m bearish because no one knows how badly our economy might weaken, how overseas economies might react to such weakness, and how many more shoes will drop in the credit and financial markets.”

Mr. Albano says he is convinced there’s a very sharp slowdown ahead in consumer spending at all levels, which he thinks will translate into an increasingly weak economy and far more erosion in stock prices. “So “I’m looking for the names of about a half-dozen of your favorite short sales,” he writes.

I rang up a sharp short seller, a Dallas hedge fund manager, and asked him for his favorite shorts. He declined to be identified, but told me he thought some of the best short candidates around could be found in a list issued by Morgan Stanley earlier this year of its top 10 short ideas for 2008.

The manager is short four names on the list that he wouldn’t specify. The 10 short ideas from Morgan Stanley are Abercrombie & Fitch, American Express, Best Buy, Caterpillar, CSX Corp., Cummins, Freeport-McMoRan, Research in Motion, Target, and Wachovia.

dandordan@aol.com