While the overall market demonstrated a little exhaustion late in the week, there are several names setting up well from a weekly view.
Four names stood out to me with basically a breakdown of two groups of two.
The first two comes from the medical device sector.
After a strong two weeks, Boston Scientific (BSX) has pushed over price resistance from the spring. The weekly chart is seeing multiple bullish crossovers along with this current price breakout. The MACD and Vortex Indicator (VTX) are both pushing bullish while the Relative Strength Index (RSI) just hit 70. The last big run from BSX came when these bullish crossovers occurred and the run continued a long time while the RSI was above 70. The bullish move did not end until we saw the RSI drop back below 70 and the MACD crossed bearish. I don't believe this current breakout has the same potential as the breakout from November 2014, but a minimal target of $21 here with the potential for $23 sits in the weekly chart. A close back under $18 put this one into neutral territory, while a close under $16.75 will cause many bulls to abandon ship.
Although not as strong, Alkermes (ALKS) is a chart waiting to break out. Bears have had their chances with this one, but notice all the bearish rejections in the yellow highlighted box. The stock has found rock-steady buyers every trip below $60 and down to $55. What makes this chart a bit more difficult is we don't have a breakout on price yet, nor do we have clean bullish crossovers on the MACD or VTX. The trend isn't clearly bullish yet. The RSI is still strong, but I would prefer to see a new high here.
ALKS does have strength in the volume here as the On Balance Volume is pushing well above the 21-week simple moving average. The target on a breakout here is $80-82, but we really needs to see a close above last week's highs. This one is worth a watch, but isn't quite into buying territory yet.
If you don't like healthcare, there are a few names in the industrial goods sector. Snap-on (SNA) broke out last week. After a nine-month run, SNA consolidated in a rounding pattern and now looks to break higher. Price is above resistance and has its targets set on $185 here. RSI is very strong with the stock performing well as long as it has stayed above 50, but best over 65. The VTX is muddled, but we do have a bullish crossover on the MACD. A continuation of the MACD along with the On Balance Volume crossing above the 21-week simple moving average here should give bulls a bit more confidence going forward.
Similar to the healthcare setup, Stanley Black & Decker (SWK) looks set up to break out, but has not triggered yet. The plus here is secondary indicators are strong or poised to break out along with price. RSI is trending higher while both the VTX and MACD has crossed over bullish. Another small push higher in price this week and we should see the On Balance Volume push above the 21-week SMA, which should be enough to trigger bullish buyers. I would target an upside of $120. But just like ALKS, I would be patient and wait for the breakout.
The choice between these comes down to whether a trader prefers a stock with a potential for price breakout or a stock one week into a price breakout. I prefer a combination of something like BSX plus SWK once it breaks out above last week's high, but this one comes down to preference as all the setups have something to offer.
