The Dow Jones Industrial Average continues to melt to incremental new highs, seemingly oblivious to the build up of overbought technical indicators, extreme bullish sentiment, and the risk of more aggressive interest rate hikes from the Federal Reserve. Stock charts are an amazing thing to watch right now, with breakouts popping up left and right.
While some of the other major averages are dithering here (ahem, Nasdaq, ahem) the Dow Jones is steadfast.
Breadth has been an ongoing concern as buying interest has been focused on areas like financials and industrials. So assuming the uptrend is going to continue, buying interest will need to widen. Nonetheless, a number of stocks look ready to roar, and they come across a number of sectors — from tech to consumer staples to even utilities.
The following is what I believe the 10 best stock charts on Wall Street right now — and many of them are comeback stories.
Best Stock Charts Right Now: Square (SQ)
Square Inc (NYSE:SQ) pushed to fresh post-IPO highs on Thursday, surging up and out of its upper Bollinger Band in a powerful show of force and breaking out of the uptrend channel that started back in June.
The catalyst for Square’s stock chart breakout was the reporting of better-than-expected revenues and earnings and solid forward guidance.
Analysts at Canaccord Genuity raised their price target on the payment processor, as concerns about competitive dynamics and profitability pressure have been alleviated. Their PT was upgraded from $14 to $16 — more or less just playing catch-up with recent gains.
Square will next report results on May 24 after the close. While SQ might need time to consolidate these gains, the stock looks like it’s off to the races for now.
Best Stock Charts Right Now: Verizon (VZ)
Shares of wireless telecom giant Verizon Communications Inc. (NYSE:VZ) are on the move in a big way, lifting out of a month-long consolidation range between $49 and $48 to lift up and out of its upper Bollinger Band.
Investors have been encouraged by the company’s ability to lower its acquisition price for Yahoo! Inc. (NASDAQ:YHOO) by $350 million in response to an embarrassing data breach. The next time we’ll hear anything from the company on the earnings front will be April 20 before the bell, when analysts will hope to see profits of 99 cents per share on revenues of $30.7 billion.
Technically speaking, VZ has one of the more hopeful-looking stock charts right now. Verizon looks ready to challenge the 50-day and 200-day moving averages before making another attempt at its summertime high near $55, which was unsuccessfully tested in early January.
Best Stock Charts Right Now: Groupon (GRPN)
Groupon Inc (NASDAQ:GRPN) shares have blasted higher — up and out of their upper Bollinger Band and above its 200-day moving average — to fill the chart gap around $4.50 from the surge in July and the decline in October.
Shares surged in response to better-than-expected quarterly numbers, noting solid consumer activity in December as confidence bounced back after the election.
RBC Capital analysts highlighted the company’s fourth consecutive quarter of adding more than 1 million users in the North American region.
The company will next report results on April 27 after the close. Analysts are expecting a break even on revenues of nearly $730 million. Between then and there, Groupon will look to challenge the $5 area — the lower part of a range where GRPN traded from September through November before bottoming out.
Best Stock Charts Right Now: TJX (TJX)
TJX Companies Inc (NYSE:TJX) is among the best stock charts in retail right now, testing levels not seen since late November.
The stock has been flatlining since last February centered on the $78-a-share level. But renewed interest after a solid earnings report could reinvigorate interest in the discount retailer. The company reported better-than-expected earnings of $1.03 per share (3 cents ahead of estimates) on a 6% jump in revenues. Management also announced a 20% increase to its dividend.
Right now, TJX is breaking up and out of their upper Bollinger Band. This could be a possible attempt to challenge last summer’s highs around $83.
Best Stock Charts Right Now: Walmart (WMT)
Wal-Mart Stores Inc (NYSE:WMT) shares are gapping higher, lifting up and out of a downtrend channel that started last summer.
The move comes after the reporting of solid quarterly results: Walmart earnings of $1.30 per share beat estimates by a penny on a 1.8% jump in U.S. comp-store sales (vs. 1.0%-1.5% guidance). The increase was driven more by customer traffic rather than average ticket, which is a positive sign suggesting a shift in behavior that could be long lasting.
The company’s next report isn’t until May 18, when analysts will want to see 96 cents per share on revenues of $117.1 billion.
Currently, WMT stock is challenging its December highs. The next big price level after that is above $74.50, which Walmart touched this August.
Best Stock Charts Right Now: Johnson & Johnson (JNJ)
Johnson & Johnson (NYSE:JNJ) shares are continuing their powerful march higher, returning to levels not seen in August after crossing above both its 50-day and 200-day moving averages, exiting a five-month basing range with support near $112-$110.
The rally stands in contrast to the slippage in late January after Johnson & Johnson reported disappointing fourth-quarter sales and issued weak forward guidance.
The rally is being fueled, it seems, by a search for value among large-cap investors.
JNJ will next report results on April 18 before the bell. Analysts are looking for earnings of $1.76 per share on revenues of $17.98 billion. Edge Pro subscribers recently closed a position in the March $115 JNJ calls for a gain of nearly 170%.
Best Stock Charts Right Now: Colgate-Palmolive (CL)
Colgate-Palmolive Company (NYSE:CL) shares are going vertical, pushing past their summertime highs to hit new records — up a whopping 17%-plus from late January.
The catalyst has been intense M&A activity in the consumer staples space, with a $150 billion-plus bid for Unilever N.A. (ADR) (NYSE:UN) from Kraft Heinz Co (NASDAQ:KHC) making headlines. Although the bid was rejected, it’s raising valuations across the sector. This was great news for shareholders after the company missed sales estimates in its latest quarterly report.
Colgate will next report results on April 28 before the bell. Analysts are looking for earnings of 66 cents per share on revenues of $3.9 billion.
Right now, the ceiling on CL shares has been removed.
Best Stock Charts Right Now: Unilever (UN)
Unilever N.V. (ADR) (NYSE:UN) shares — the ADRs traded here in New York — are consolidating their post-M&A announcement surge near last September’s highs which in turn capped a multi-month consolidation range.
While Unilever rejected the offer from Kraft Heinz as too low, resulting in the bid being pulled (as mentioned above), this was quickly followed up with an announcement of a comprehensive review of options to boost shareholder value.
KHC may well continue to circle the company, especially if shareholders lose patience with management.
For now, let speculation be your friend as UN pushes new heights.
Best Stock Charts Right Now: Duke Energy (DUK)
Duke Energy Corp (NYSE:DUK) looks like one of the best stock charts in the utility sector, with DUK rising up and out of an inverse head-and-shoulders reversal pattern that started in October. Shares are above their 200-day moving average as they extend above the upper Bollinger Band.
Although the company reported weaker-than-expected earnings on Feb. 16, shares are being propelled by a surge of buying interest in the entire utilities space. Thus, Duke’s next report isn’t for a while — May 2, before the bell, when analysts will look for a bottom line of $1.08 per share on a top line of $6.1 billion.
In the meanwhile, watch for a run at the July high near $84.50.
Best Stock Charts Right Now: Southern Co (SO)
Speaking of utilities, Southern Co (NYSE:SO) shares are blazing up and out of a four-month basing pattern while also rising up and over their 200-day moving average and upper Bollinger Band.
The impressive demonstration of upside strength on Southern’s stock charts breaks a downtrend pattern that started last summer and follows the reporting of mixed quarterly results: Earnings of 24 cents per share missed estimates by 6 cents, but revenues rose 45% from the prior year to $5.18 billion vs. the $4.4 billion expected.
The company, which next reports on May 24 before the bell, is benefiting from renewed interest in yield-sensitive utility stocks as long-term interest rates stall out.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.
