Bulls got a taste of victory Friday and returned from the weekend wanting more. With stocks jumping over 1% across the board this morning, the backdrop could be set for profitable long trades. Today we’ll look at three stocks to buy offering breakout chart patterns.
One development emboldening buyers is the weakness finally striking bond prices. It was bound to happen sometime given their meteoric rise and is easing the panic. The past month has seen a mad dash into fixed-income due to pessimism over economic growth and lower inflation expectations.
Fortunately, the companies highlighted in today’s gallery haven’t cared one bit about plunging interest rates or inverted yield curves. They all boast super-strong trends and earnings growth that continues unabated.
Behold, three breakout stocks to buy for the week.
3 Breakout Stocks to Buy: Edward Lifesciences (EW)
Edwards Lifesciences (NYSE:EW) is a medical equipment company based out of Irvine, California. EW stock price has been virtually untouched during the recent ruckus and popped to a new record high Friday. The culprit for its extraordinary strength is the variable that always allows a stock to buck the general market trend: earnings.
If Edwards Lifesciences continues to post record earnings numbers, why should it could up in the trade war and inverted yield curve drama?
Since its mid-July pole vault, EW stock has spent the last month building a textbook high-base pattern. The consolidation allowed the stock to digest its gains and build a foundation for its next ascent. With Friday’s rally to the upper end of its range, an upside breakout looks imminent.
Buy the November $220/$240 bull call spread for around $8.30.
Though it hales from a completely different sector, the story behind Fiserv (NASDAQ:FISV) mirrors that of EW. Strong earnings lifted the Wisconsin-based provider of financial services technology to new heights last month, and we’ve since seen the formation of a textbook high base pattern.
Broad market weakness prove impotent in knocking FISV stock from its well-deserved perch. The few down days cropping up over the past month haven’t been able to push FISV below its rising 20-day moving average. The 50-day and 200-day moving averages are also rising loyally beneath and reflect buyers’ dominance across longer time frames.
This morning’s up-gap could be the breakout spectators have been waiting for. Buy the October $110/$115 bull call spread for around $1.80.
The final member of today’s trio is Starbucks (NASDAQ:SBUX). It’s on pace for a banner year, currently up 50% for 2019. It too has wholly sidestepped the drama playing out in the market. We have seen sporadic down days but nothing powerful enough to breach even the 20-day moving average.
And that’s saying something given the bloodbath elsewhere.
The holding pattern seen since last month’s mighty earnings gap is a welcome development setting up a more sustainable breakout. While some time may be needed yet before SBUX stock is ready to run again, it’s worth putting on your radar now. $100 is the level to watch. Once broken, buyers should come running.
Upside call vertical spreads are a low-cost way to play here. Buy the November $100/$105 bull call spread for around $1.60.
As of this writing, Tyler Craig didn’t hold a position in any of the aforementioned securities. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility.