Stocks surged higher on Wednesday thanks to a combination of factors. JPMorgan Chase & Co (JPM) beat lowered expectations, China’s export volume surprised to the upside and producer price inflation cooled, raising hopes the Federal Reserve can hold off on interest rate hikes until later this year.
As a result, the Dow Jones Industrial Average is challenging the 18,000 level last crossed on a closing basis in July. This is a level first crossed in late 2014, suggesting a protracted funk in U.S. equities could be ending.
Things won’t be easy, as many negative catalysts remain, including the rest of the set-to-be-weak Q1 earnings season, the threat of a June rate hike from the Fed, the need for a positive outcome from the over-the-weekend oil production negotiations between Russia and OPEC and a recent spate of weak U.S. economic data.
But if an uptrend is going to be continued, keep an eye on the performance of these three stocks: GoPro Inc (GPRO), Twitter Inc (TWTR) and Fitbit Inc (FIT).
GoPro Inc (GPRO)
Shares of action camera maker GPRO have been in a long, persistent decline since October 2014, since the video-from-the-helmet buzz faded quickly as legions of eager Facebook Inc (FB) users realized their lives weren’t really epic enough to justify POV filming. Product missteps and increasing competition played a role too.
But a turnaround could be at hand, with the company preparing new products including a video drone and poaching design talent from Apple Inc. (AAPL). That latter boosted shares 19% on Wednesday, threatening a breakout from a four-month consolidation range.
Twitter Inc (TWTR)
Shares of social media oddball TWTR have been in decline since peaking in late 2013/early 2014 on persistent questions over user growth, monetization and engagement. A management shakeup hasn’t changed much. And shares have spent 2016 languishing between $15 and $20.
But the stock is on the move, preparing a possible breakout from a multi-month wedge formation, on positive headlines including an announcement it will stream 10 Thursday Night Football games from the NFL.
FitBit Inc (FIT)
The wearables thing sort of faded out after the AAPL watch disappointed and fitness trackers became commoditized. FIT shares have been in persistent decline since its IPO last summer, mirroring this loss of enthusiasm. But the pendulum could be swinging back towards hope thanks to popular new products, increased App downloads (showing user growth) and focus on corporate wellness initiatives.
A return to the November-December trading range would be worth nearly a double from here.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.
