Matt Krantz authored a story in today's USA Today, "These 10 stocks ride tireless bull to epic gains." It reminded me of the "Back to the Future" movies. If you had a list of the 10 stocks that had spectacular advances from the 2009 low at the white-knuckle bottom instead of seven years later -- that would be really impressive. Robert Zemeckis did you hear me? We decided to look over this list of past winners and see if they looked promising from this point in time going forward. Just three names rose to the top of our technical filters.
General Growth Properties (GGP) looks like it can rally from here.
GGP has traded sideways in a $24 to $29 range since last May (see the chart, above). Since September, we can see a rising On-Balance-Volume (OBV) line, indicating that buyers of GGP were more aggressive, as there has been more volume traded on days when GGP closed higher. The price of GGP is now above the 50-day and 200-day moving averages, and the trend-following Moving Average Convergence Divergence (MACD) oscillator is in a bullish configuration above the zero line.
In this long-term chart of GGP, above, we can see that prices are above the 40-week moving average. The OBV line is rising and the MACD oscillator is crossing above the zero line for a go-long signal. The daily chart of GGP looks like a sideways consolidation, but the weekly chart looks like a saucer bottom. A breakout over the $29 level should support a rally to the $33 area (the height of the consolidation, $4, is added to the breakout at $29 for a target of $33).
United Rentals (URI) has promise on the charts after an important retracement.
URI has rallied to cross the 50-day moving average, but it has not yet crossed above the 200-day average. Moving averages are "black and white" indicators, just as buy and sell signals are clear -- no room for gray. Here is a gray signal: the On-Balance-Volume (OBV) line did not make a new low with prices in February. A lower low in price and an equal low in the OBV line is a bullish divergence -- this gray signal tells a chartist that selling pressure dried up at the low -- which is a positive signal. In the bottom panel, we can see a crossing of the MACD oscillator below the zero line -- this is a cover-shorts signal, and the MACD oscillator could soon cross above the zero line for a buy signal.
This longer-term chart of URI, above, is at a turnaround stage. Prices are still below the declining, 40-week moving average, but a major two-thirds retracement to $40 from $120 is behind us. The OBV line is only down a little from its peak, indicating that for some reason selling has not been aggressive. Last, the MACD oscillator is crossing below the zero line for a cover-shorts signal.
The improvement in CBS (CBS), chart above, has been impressive. CBS has turned up nicely from its September low. Prices are now above the 50-day and 200-day moving averages and the slope of the 50-day average line is pointed up. The OBV line has been rising from the September low, indicating a good period of accumulation. The MACD oscillator has a bullish setup and there is no chart resistance until CBS gets back up the $60 to $63 area.
In this longer-term picture of CBS, above, we can see a two-year correction. The correction appears to be over, with prices now above the 40-week moving average. The OBV line has turned up and the MACD oscillator is close to crossing above the zero line for a new buy signal.
We can check in on our favorites in a few months to see how they are doing.