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Final week, the S&P 500 traded principally sideways regardless of outsized beneficial properties in a number of heavyweight FAANMG shares. In truth, a lot of the underlying sectors on this Index had been down over 1% for the week whereas buyers sorted by information, resembling a possible shift within the Federal Reserve’s tapering timeline as a consequence of excessive inflation.
There have been pockets of outperformance, nonetheless, led by analysts’ upgrades and administration shakeups that pushed choose shares into compelling positions.
WEEKLY CHART OF PLUG POWER, INC. (PLUG)
First up is hydrogen fuel-cell tech firm Plug Energy (PLUG), which popped at present after Morgan Stanley boosted their value goal for the corporate by 51%. Earlier within the week, Citigroup had a equally giant value goal improve for the corporate.
Plug Energy plans to make hydrogen-powered heavy-duty vehicles whereas additionally manufacturing and distributing the hydrogen gasoline required. This, in flip, is anticipated to drive gross sales into 2030. PLUG was an enormous winner for me following its post-election rally from November 2020 rally into February 2021, and the inventory has been on my Watch Listing.
The weekly chart above seems to be significantly fascinating, with the MACD simply coming into constructive territory. The RSI can also be in a constructive place, with a Golden Cross formation happening final week. Weekly charts present perception into the potential for longer-term strikes; a concerted transfer into different different power shares would give me further confidence in PLUG.
DAILY CHART OF MICRON TECHNOLOGY (MU)
Lagging Know-how firm Micron (MU) reversed its downtrend on Friday after being added to Wall Avenue agency Evercore’s high inventory choose listing. The corporate misplaced share worth after DRAM pricing flattened out in Could of this yr, which, in flip, lowered the income outlook for the corporate.
Whereas MU isn’t anticipated to show worthwhile till the 2nd quarter of subsequent yr, the market’s predisposition to look out two quarters when evaluating a inventory has this analyst considering a run up in MU’s value is within the works. MU broke again above its 200-day transferring common on quantity and, whereas constructive, I might have to see a extra sustained transfer above this key space of resistance to verify that an uptrend is in place.
DAILY CHART OF DOLLAR TREE, INC (DLTR)
Final up is Greenback Tree (DLTR), which soared to a brand new excessive this week after activist agency Mantle Ridge unveiled a $1.8 billion stake within the low cost retailer. Pleasure over the information stems from the truth that Mantle Ridge has a very good observe document and is named a long run investor who focuses on a couple of investments at a time.
As you possibly can see, DLTR gapped up on heavy quantity right into a multi-month base breakout and has since trended greater. A pullback to its 5-day transferring common on its day by day chart could be a super entry level because the inventory continues to development greater.
There have been different robust areas of the market final week as properly, which I will be reviewing intimately in my MEM Edge Report on Sunday. This twice-weekly report supplies alerts to high-growth shares which can be poised to outperform the broader markets. It additionally supplies insights into sector and trade group rotation not seen elsewhere.
You can use this link here for a 4-week trial that features fast entry to present stories.
On this week’s edition of StockCharts TV’s The MEM Edge, I share easy methods to commerce shares after they’ve massive gaps up. I additionally evaluate alerts {that a} downtrend reversal has additional upside potential, in addition to small-cap shares in bullish positions.
Warmly,
Mary Ellen McGonagle
President, MEM Investment Research
Mary Ellen McGonagle is an expert investing guide and the president of MEM Funding Analysis. After eight years of engaged on Wall Avenue, Ms. McGonagle left to develop into a talented inventory analyst, working with William O’Neill in figuring out wholesome shares with potential to take off. She has labored with shoppers that span the globe, together with massive names like Constancy Asset Administration, Morgan Stanley, Merrill Lynch and Oppenheimer.
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