Stocks are continuing their upward march on Monday, with the Dow Jones Industrial Average on track for its seventh-consecutive rise. Headlines are light, with worries over U.S.-China tensions easing slightly as President Trump surprised many on Sunday night with a pledge to help Chinese telecom giant ZTE “get back into business, fast” after a U.S. ban crippled it.
This, along with ongoing profitability growth tailwinds from the rise in energy prices, has the bulls out in force. The result has been a widening of measures of market breadth, suggesting the upside movement has some momentum and thus should continue.
With that in mind, here are 3 stocks to buy before they break out:
Stocks to Buy Before They Break Out #1: Target (TGT)
Target Corporation (NYSE:TGT) shares are perking up in what looks like preparation for a breakout. Year-to-date, TGT has been rangebound with resistance near the $74-a-share level. This caps a long sideways range going back to early 2015 as the retailer has struggled with online competitors, tepid traffic growth, and profitability worries. Management is in the midst of a turnaround effort with store reinvestment underway.
The company will next report results on May 23 before the bell. Analysts are looking for earnings of $1.39 per share on revenues of $16.5 billion. When the company last reported on March 6, earnings of $1.37 missed estimates by a penny on revenue growth of 10%.
Stocks to Buy Before They Break Out #2: Western Digital (WDC)
Western Digital Corp (NASDAQ:WDC) shares are challenging their 20-day moving average for the first time since the middle of April. This breakout could potentially start the process of reversing a 28%+ decline from its mid-March highs. Shares are getting a boost thanks to a coverage initiation by analysts at JPMorgan, who have assigned a “Buy” rating to the stock.
The company will next report results on July 26 after the close. Analysts are looking for earnings of $3.50 per share on revenues of $5.1 billion. When the company last reported on April 26, earnings of $3.63 beat estimates by 32 cents on a 7.8% rise in revenues.
Management revealed strong upside projections for earnings and an in-line revenue outlook.
Stocks to Buy Before They Break Out #3: Qualcomm
Qualcomm, Inc. (NASDAQ:QCOM) shares are zooming higher. QCOM retook its 50-day moving average for the first time since late February thanks to word Chinese and U.S. regulators could speed the review of the company’s planned purchase of NXP Semiconductor NV (NASDAQ:NXPI). There’s an element of quid-pro-quo here, as Trump looks for a deal with China’s President Xi to ease trade hostilities between the two countries.
Qualcomm will next report results on July 25 after the close. Analysts are looking for earnings of 71 cents per share on revenues of $5.2 billion. When the company last reported on April 25, earnings of 80 cents per share beat estimates by nine cents on a 13.3% decline in revenues.