USA Today reported Thursday the seven top-performing S&P 500 stocks for the month of August -- NetApp (NTAP) , Micron Technology (MU) , Urban Outfitters (URBN) , Endo International (ENDP) , Symantec (SYMC) , Chesapeake Energy (CHK) and Williams Companies (WMB) . Filters like this are interesting, but they only give you a hindsight look at the markets. Hint: You make money by being forward looking.
Going through this short list for the best-looking charts now and heading into the back end of the year, I culled the list down to just two names: Micron Technologies and Williams Companies.
In this daily chart of MU, above, we can see a nice saucer bottom pattern from January through May. Prices, volume, the On-Balance-Volume (OBV) line, and the 50-day moving average line all turned up in May and June. Notice the pickup in volume at the end of June, as prices made new highs and closed above the 200-day moving average line.
A bullish golden cross of the 50-day and 200-day averages appears at the end of July. Our price-momentum indicator in the lower panel is not signaling any worrisome bearish divergences. Shallow dips in MU could be bought, risking a close below $13.
In this twelve-month daily bar chart of WMB, above, we can see a "textbook" uptrend from a February low. The slope of the 50-day is positive, and it has been tested several times. Prices had rallied enough to clear the 200-day average line at the beginning of August. Confirming the uptrend is the rising OBV line, which tells us that buyers of WMB have been more aggressive since February. Momentum has slowed a little from July to August, and this might foreshadow some price softness for WMB. With nearby chart support around $25 and the rising, 50-day average just below that level, a pullback in WMB is likely to be relatively shallow -- and presents a buying opportunity. A deeper decline to $22 would warrant a reappraisal of my bullish hypothesis.
What about the rest of the list? NetApp, Urban Outfitters, and Symantec are all extended on the upside and vulnerable to a deeper setback from here. Endo International looks like it is stuck in a base pattern and Chesapeake Energy lacks buying enthusiasm.