The stock market so far this year has been a study of contrasts. On one hand, the S&P 500 index and Nasdaq Composite index have rallied to all-time highs. On the other hand, though, we’ve seen bear markets in growth stocks and cryptocurrencies. With all these different cross-currents, that has has us looking for the best stock charts out there.
Not all stocks have to be cruising at all-time highs to be a buy. There are a few all-time high picks in the list below, but many are set up as potential dip-buying opportunities or being scouted as dip-buying opportunities.
Some investors aren’t big on the technicals and focus only on the fundamentals. Others focus solely on technical analysis. In reality, a blend of both usually provides the best results. A high-quality company pared with solid to strong technicals can generate serious alpha for those willing to do the work.
While a picture may be worth a thousand words, we’re just looking for one: upside. Let’s dig into seven stocks that have a solid technical footing with the best stock charts.
- Starbucks (NASDAQ:SBUX)
- Amazon (NASDAQ:AMZN)
- Apple (NASDAQ:AAPL)
- Progyny (NASDAQ:PGNY)
- SPDR Dow Jones Industrial Average ETF Trust (DIA)(NYSEARCA:DIA)
- KKR & Co (NYSE:KKR)
- Home Depot (NYSE:HD)
Must-See Stock Charts: Starbucks (SBUX)
Starbucks has one of the best-looking charts I’ve seen in a while. In fact, I won’t lie to you: I actually printed this one off and added some annotations to it. Then I added it to my “chart save” folder. This helps me imprint these patterns and spot them faster during my scans.
In any regard, let’s look at Starbucks.
SBUX stock gave use a beautiful setup a few weeks ago, when shares pulled back to uptrend support — that being the 21-week moving average. While it closed the week near its lows, it was near this mark.
The next week, Starbucks held the 21-week moving average with a higher low. That was followed by reclaiming the 10-week moving average. Finally, Starbucks gave patient bulls exactly what they were looking for: A rotation over the last two weeks’ worth of highs at $113.22.
It’s not too often we get a setup like this where the weekly high is exactly the same two weeks in a row. Starbucks then gave bulls a monthly up-rotation, too.
All in all, it has Starbucks pushing for the all-time high near $119. Above that and $120-plus is possible, with the 161.8% extension coming into play near $130.
While Starbucks may have one of the best-looking charts I’ve seen in a while, Amazon has one of the cleanest breakouts I’ve seen in quite some time.
Above is a weekly chart, highlighting the nearly one-year long trading range that AMZN stock has bounced between. You’ll see $3,350 was resistance while the $2,900 area was support. The stock had two stints at the $3,550 area and both times it was rejected.
In fact, Amazon was rejected rather harshly from both zones.
Regardless, while everyone was seemingly paying attention to the flailing 200-day moving average, many didn’t seem to notice that the 50-week moving average was doing a perfectly fine job buoying the stock.
Now breaking out over the $3,550 area, shares are moving higher. It would be incredibly bullish to see a pullback to the $3,550 level and see it act as support. If it does, it only increases the odds that Amazon can power its way up toward the 161.8% extension near $4,000.
Like Amazon, Apple has been a tricky trade. Most mega-cap tech stocks have been busy running to new all-time highs. With Amazon, we can put the stock in that group now too.
However, Apple continues to wallow in its range. It has been trapped below the $138 measure for a while now, with the exception of one minor breakout to $145 in January. It did have the added benefit of trading in a large ascending triangle, as rising uptrend support (blue line) continued to guide it higher into that static level of resistance ($138).
Now above $138 and AAPL stock is gunning for the all-time high near $145.
The earnings have been incredible and the stock hasn’t been reward. With shares doing nothing but collecting dust for almost a year, bulls are anxious for a breakout.
I would love a dip to the short-term moving averages and a retest of the $138 mark — sort of like Amazon retesting the $3,550 area. This takes some of the hot air out of these names and allows them to reset and rest. That doesn’t mean it will happen, but it gives bulls a better risk/reward if it does.
Either way, these two mega-cap stocks could be the stock charts that lead us higher in the second half.
Progyny isn’t a name that gets a lot of discussion. That’s likely because it’s not a high-flying tech stock, has a $5.5 billion market capitalization and somewhat volatile price action. Still, the charts don’t lie.
In case you’re wondering, this is a benefits management company that specializes in fertility and family-building benefits solutions. Now, back to the stock chart.
After a nice gap-up in May, shares were flagging nicely between $62 and $65 per share. Unfortunately for the bulls, PGNY stock broke lower out of that flag, rather than higher.
However, the 10-week and 50-day moving averages have been buoying the stock since. This name can now go one of two ways. Progyny stock has done incredibly well so far this year, up 44% in 2021. It didn’t suffer the same fate as growth stocks during the recent bear market and is one of the stronger stock charts out there.
So from here, I’m either looking for a rotation higher or a pullback to stronger support. If it’s the former, look for a rotation back over the 21-day moving average and $62. That puts $65 in play, then the 261.8% extension near $70.
If it’s the latter, a close below the 50-day moving average could put the 21-week moving average in play. That measure has been very strong support so far this year.
SPDR Dow Jones Industrial Average ETF Trust (DIA)
Both the Dow Jones futures (YM) and the SPDR Dow Jones Industrial Average ETF Trust (DIA) look interesting here.
After a sharp bounce from the 21-week moving average, exchange-traded fund DIA quickly recovered the 10-week, 10-day, 21-day and 50-day moving averages. While shares struggled with the weekly rotation last week, we got the move we were looking for.
Now the Dow is holding up nicely over downtrend resistance (blue line), while bulls continue to buy the dip near the 10-day moving average. If we get another weekly-up rotation, it likely sends the DIA to the prior highs near $351 and the YM futures up to 35,000.
I prefer waiting for this rotation rather than buying and hoping we get it. That’s as we face low summer trading volumes and after a strong run in the indices. Aggressive traders will prefer to buy before the rotation, particularly on a test of the 50-day moving average. Should we see the 21-week moving average again, that may very well trigger a buying opportunity too.
While the other indexes have been hitting new all-time highs, the Dow has not. A rotation into this index could trigger a move to some of the upside extensions. But it has to clear its highs first.
KKR & Co (KKR)
Like Progyny, private equity and investment management firm KKR has had a very fruitful year, with shares up almost 47% in 2021. Again, it’s not a high-flying oft-talked about stock. Instead, consistency has been the name of the game as shares continue to grind higher.
In early June, KKR tested its 10-week and 50-day moving averages. This led to an explosive rally and resulted in new highs. Pulling back from those highs now, KRR is testing the 10-day moving average.
For aggressive buyers, that’s the only sign they need. However, it helps that KKR stock retested its prior high at $59.15 and is currently holding this area as support. From here, we need to see a move back over $60 to put the current high in play, then a move into the mid-$60s is possible.
On the downside, a break below $59 could put the 10-week and 50-day moving averages back in play.
Home Depot (HD)
Home Depot also has a two potential scenarios for us. Meaning, a deeper pull ruins the current setup, but offers us a potentially better one if it sets up right. That said, shares are responding well to current support and could put more upside in play right now.
If that’s the case, look for a rotation over the $324 area. That comes after a test of the 10-day and 50-day moving averages, and opens up a move toward $330. Above $330 and we can see a push up toward the gap-fill measure near $340.
If support doesn’t hold, Home Depot could be looking at a minor correction down to the 21-day moving average. However, a larger dip puts the $300 area in play and the 200-day moving average.
As much as I’d like to see Home Depot rotate higher and reward the current dip-buyers, it’s hard to deny the attraction of a larger pullback. Specifically, if that resulted in a “C” wave down toward the prior high near $293 and the 200-day moving average. Bulls would almost have to take a shot at Home Depot in that scenario.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.