6 Stock Charts to Watch for Big Breakouts

Equity investors have plenty to worry about, but so far that hasn’t derailed the bull market.

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Source: ©iStock.com/mrvintervind

Despite underperformance for small-caps and specific sectors such as coal and retail, the S&P 500 achieved yet another all-time high on Wednesday morning. If the stock market takes the skeptics by surprise and continues to rally through the traditionally weak month of August, traders have plenty of ways to capture some added beta on the upside via individual stocks.

For those looking to play for continued gains in the market, the stock charts of five individual companies and one exchange-traded fund stand out for their potential to break out in the weeks ahead.

Stock Charts to Watch – Morgan Stanley (MS)

morgan stanley stock charts msThe financial sector remains in good shape technically, with the SPDR Financial ETF (XLF) just short of its 52-week high of $23.07. If financials can move out to new high ground, two stocks look poised to outperform: Morgan Stanley (MS) and Prudential Financial (PRU).

Morgan Stanley stock closed at $32.91 on Tuesday, and it sits just short of its 52-week high of $33.52. Above this level, MS has a straight shot to its October, 2009 post-crisis high of $35.74. With a forward price-to-earnings ratio at an inexpensive 11.4, the stock has room to run in a positive tape.

Stock Charts to Watch – Prudential (PRU)

Prudential, 2-Year pru stock charts
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Prudential Financial (PRU) also is flirting with a new high. At Tuesday’s close of $90.76, Prudential is within range of its breakout point at $92.68. The stock soared in 2013 due in part to rising bond yields, and it has moved sideways so far this year as bonds have rallied. If yields begin to tick back up again, PRU stock could be re-energized.

The company reports earnings on Wednesday, Aug. 6.

Stock Charts to Watch – Nike (NKE)

Nike stock charts nke
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Outside of financials, three individual stock charts stand out for potential trading opportunities from the long side.

First is Nike (NKE), which is approaching its 52-week high of $80.26. With a strong base established and its moving averages both trending upward, NKE stock is in a position for a strong second half.

Stock Charts to Watch – BHP Billiton (BHP)

BHP Billiton stock charts
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The mining sector is also a source of opportunity right now, as evidenced by recent 52-week highs set by Freeport McMoRan (FCX), Southern Copper (SCCO), and others.

Now, it looks like BHP Billiton (BHP) could be the next to break out. BHP stock edged out into new high ground on Tuesday, and the most recent volume above its current price of $73.26 occurred in February 2013. Now in territory where there is less overhead supply, BHP could see a continuation of its recent rally.

Stock Charts to Watch – Stericycle (SRCL)

Stericycle stock charts srcl
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Traders also should take a close look at Stericycle (SRCL), which has tried and failed to surmount the $120 level on five separate occasions in the past year-plus. This has proven to be strong resistance, so shares of this medical-waste manager could stage a meaningful rally on a breakout.

Stericycle reports tomorrow, July 24.

Stock Charts to Watch – iShares MSCI Japan ETF (EWJ)

iShares MSCI Japan ETF  stock charts
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In the realm of ETFs, the iShares MSCI Japan ETF (EWJ) has printed a formation that indicates significant upside if the fund can break out. EWJ has registered multiple hits near the $12.25 level in the past year, and its current price of $12.14 places it on the verge of moving into territory it hasn’t seen since 2008.

iShares MSCI Japan Small-Cap ETF  scj stock charts
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A positive sign for Japanese large caps can be found in the chart of iShares MSCI Small Cap Japan Index Fund (SCJ), which has already rallied to new highs off of a similar formation.

Intrepid investors who want a leveraged play on a breakout in the Japanese market can also consider Direxion Daily Japan Bull 3x Shares (JPNL).

As of this writing, Daniel Putnam did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2014/07/6-stock-charts-breakouts/.

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