July is one of the only summer months that provides some seasonal strength for stocks. This year is no different, as light-volume trading is allowing stocks to improve their technical picture. Among those in focus today are Whole Foods Market, Inc. (NASDAQ:WFM), Facebook Inc (NASDAQ:FB) and J B Hunt Transport Services Inc (NASDAQ:JBHT).
Whole Foods Market, Inc. (WFM)
Whole Foods Market has spent the last year competing with the likes of The Kroger Co (NYSE:KR) and other grocers that nudged into the organic market, causing the company’s stock to plummet by about 50%. Now, after some tweaks to Whole Foods’ business, investors are coming back to this value play, which is creating a bullish technical condition.
Last week, Whole Foods Market shares completed a golden cross pattern where its 50-day moving average crossed above its 200-day MA. This pattern formation often indicates an intermediate- to long-term shift in the technical trend of a stock.
The last golden cross for Whole Foods Market stock was in December 2014, just before the company made a three-month move from $48 to $58 (a 20% rally).
Facebook Inc (FB)
FB shares have been holding a strong trend and relative strength pattern against the market for more than a year as the company continues to prove their value.
The shares recently pulled back to make a quick test of their 200-day moving average during the Brexit correction, but have quickly regained their strength as the stock closed Friday back above its 50-day MA.
If shares maintain their current course, we should expect to see Facebook stock challenge the $121 level, which will begin to mark new high territory. It’s hard to think that FB could attract more buyers, but this technical leader clearly has a trend that remains its friend and a likely market leader for the rest of the summer.
J B Hunt Transport Services Inc (JBHT)
Transportation companies are beginning to show some signs of strength after acting as a relative strength laggard against the broad market. There are a few trucking companies that have stood out from the crowd technically like J B Hunt .
After taking much of the April through July period to drift lower, JBHT shares finally found some technical buyers as they touched down on their 200-day moving average. This resulted in a rally that followed up with a bullish break back above the stock’s 50-day trendline, attracting even more buyers.
Now, with the technical picture improving, JBHT stock is getting ready to see a bullish shift in its 50-day trendline as it transitions from a declining pattern to rising. Our studies show that a stock is two times more likely to have a positive trading day when its 50-day moving average is trending higher.
