The market’s volatility through 2016 hasn’t spread to all stocks. As a matter of fact, there are a number of low-volatility stocks that have been pressing to new all-time highs while the rest of the market has gyrated in their own ranges.
Names like Lockheed Martin Corporation (NYSE:LMT), Johnson & Johnson (NYSE:JNJ) and Nvidia Corporation (NASDAQ:NVDA) have been in amazing trends that any technical trader would respect.
Lockheed Martin (LMT)
LMT returned 31% over the past year, but it’s still failed to grab the attention of Wall Street. Only 37% of the analysts covering LMT stock rank it a “buy.” The good news is that it raises the contrarian case for Lockheed.
Shares of Lockheed Martin have traded at less than 68% of the volatility in the S&P 500 Index for the past year while more than tripling the returns of the broad market index and paying a 3.6% dividend yield. LMT stock has traded so strongly that it now looks overbought for the long term. But traders should remember, however, that expensive can always get more expensive. In other words, this trend could continue to play out to your advantage.
LMT shares have rolled over slowly from their overbought condition and are currently targeting the $245 level, which would be an attractive buy price according to the charts.
Nvidia Corporation (NVDA)
Low volatility moves can still be fast; that’s been the case with NVDA, as the leader in the semiconductor sector as their mobile and entertainment products have gained in market share strongly over the past two years taking the place of a number of Intel Corporation (NASDAQ:INTC) products and fueling a strong rally.
Nvidia shares are trading above all of their key trendlines and well into bull market territory, almost to a fault. The stock has stretched the stock’s momentum and stochastics to overbought readings, but the dramatic improvements in fundamentals have warranted the shares’ rally over the past year.
Nvidia’s earnings announcement is approaching on Aug. 4. Previous earnings reports have resulted in monster moves higher, followed by selling after the news. That said, traders should be looking at adding NVDA shares ahead of this event for their short-term rally potential.
Johnson & Johnson (JNJ)
Johnson & Johnson shares are one of the lowest volatility stocks within the group of stocks ranked “strong buy” by our technical scoring model. JNJ stock’s 2.6% dividend has helped maintain this low volatility.
JNJ shares trade with less than 70% of the S&P 500’s volatility, meaning it’s traded in a relatively straight line, a benefit for traders and investors alike. We’ve recently seen a surge in prices after a positive earnings report. This surge took shares into technical overbought territory and sets JNJ shares up for a slight pullback.
The shares’ 50-day moving average, which has been extremely supportive, is lying in wait at $120 to provide support and a potentially great entry price for traders to grab the next rally in this low volatility leader.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
