In the earliest stages of a new bull market, it seems so easy to make money. You can throw a dart and immediately start counting your unrealized gains. What fun! Well, you know what they say about confusing genius with a bull market, right?

In my trading and investing, I always focus first on not losing money. When buying dividend-paying stocks, I look for quality companies that are trading near support levels at which institutional buying has historically taken place. As a stock moves higher, up from its support level, you have more risk of immediate loss.

For example, if a stock has rallied 15% to 20% from its support level (which is the case for many stocks right now), it could quickly retreat to its support level on a bad news event, such as an earnings miss or analyst downgrade. You’d have a quick unrealized loss of 20% or so, not very tasty. If a stock is at support levels and bad news comes out, it tends to stay close to that level and usually doesn’t drop a lot, unlike the extended stock.

Of course, you can never know for sure whether you’ve picked a proper entry point on a stock, but you can put the odds in your favor by following some basic rules:

1. Select only quality dividend-paying stocks, which are rated B or better by Value Line or Standard & Poor’s.
2. Buy stocks that are either sitting near long-term support levels or starting to form a new base of support after an initial run-up. A stock is a relatively safe purchase at support levels because that’s where institutional investors usually buy the stock. Or, if a stock has started to run, it will usually form a second base after the initial surge. This second base or consolidation period is a fairly safe spot to enter a stock that you missed for the first run. The idea is to ride with the strong money and limit downside risk as much as possible.
3. Avoid any stock that’s extended beyond its support level, which is easily spotted by looking at 10-year chart patterns. If a stock has recently moved up 20% or so, it’s obvious from the spike up in the chart pattern. As it gets extended, don’t chase it. If you’ve missed the first move, so you’ll have to wait for another support level to develop before buying the stock.
4. Buy a stock when it’s near the 50-day moving average whenever possible. If a stock is trading well above that point, you have more risk of immediate loss. The 50-day moving average price is often the level at which institutional investors and traders will step in. Once the stock begins to climb, the smart money is already in it.
5. Focus on dividend payers that are a trading close to their 50-day moving average or below it. Or, if a stock has just started to romp on big volume, you can buy it if it isn’t too extended (10% above its moving average is still safe). If big investors have just started to accumulate a stock after it has built a long base (sideways pattern), it probably has a lot more upside left, so even if you miss the initial surge, you should still be in good shape.

Here are some stocks that I like right now. They’re sitting below their 50-day moving averages and/or near long-term support levels:

• Superior Industries (SUP.NYSE): This quality maker of steel and aluminum wheels for the auto industry has recently been hit hard by downgrades. I smell opportunity. The company has a long history of paying and raising dividends, which went from 5 cents a share in 1987 to the current 55 cents, with an increase every year. That’s a great sign of financial strength.

The stock is now sitting at a fairly strong support level at about $36, with upside resistance at about $50. Superior trades for about 15 times forward estimates and yields 1.3%. Its dividend payout ratio is minimal at 20% of earnings, so growth is quite possible in coming years.

• Vodafone (VOD.NYSE): This is a great play on a recovering cell-phone market. Indeed, cell-phone manufacturers like Nokia (NOK:NYSE) and Motorola (MOT:NYSE) have been on a tear lately. Still, after rocketing off a base on heavy volume in 2002, Vodafone has now corrected somewhat and is sitting back at its 50-day moving average.

If you’re interested in owning a blue-chip dividend play in the cell-phone market, consider this name, especially if your time horizon is three to five years. Its yield is about 1.2%. The dividend has been raised each year since 1993, another positive. I’d consider this an aggressive choice for a dividend investor, so you need to believe in a turnaround in this industry to own it, which I do.

• Black Hills (BKH:NYSE): This South Dakota-based electric utility should appeal to income-oriented investors. Its yield is a bit above 4%, which is not phenomenal for a utility company. However, by my estimation, the downside risk is minimal right now. Trading at $30, the stock has good long-term support, and it’s sitting at its 50-day moving average. The upside isn’t huge, but that’s rarely the case for a utility stock. I’d put a price target on this stock at $40 for the coming three years, based on my analysis of cash flow projections and chart patterns. Throw in the yield, and you have a nice average annual return. Its payout ratio is low at 54%, which means there’s room for dividend growth. Management also has a great track record of raising dividends, from 55 cents a share in 1987 to $1.24 in 2003.
• Marsh & McLennan (MMC.NYSE): This leader in insurance, investing and consulting services is sitting near a strong support level of about $45. The stock trades for about $48 right now; the downside risk looks to be about $3. Marsh is a financially solid blue-chip, A-rated company. It’s raised its dividend consistently from 38 cents a share in 1987 to the current $1.24. It’s yielding about 2.6%. The payout ratio is pretty low at 43% of earnings, which bodes well for continued dividend growth. The company trades at a forward P/E multiple of 16; it’s priced similar to its peers and is a better value than the market itself. Marsh looks like a good purchase at these levels, and I’d add to it if it moved back down to the mid- to low $40s.

Again, whenever you’re buying a dividend-paying stock — or a speculative one that doesn’t pay a dividend, for that matter – focus first on not losing money. It’s tough to dig yourself out of a hole once you’re in it, so buy at strong support levels.