The big market indices are ending the week on a strong note, hitting new all-time highs Friday.
All the usual suspects are leading the market higher today. Just two weeks into the New Year and markets are looking a whole lot like they did during 2017 -- only better.
That's right, the broader market actually looks better in the first sessions of 2018 than it did during last year's massive rally. As I write, nearly 80% of S&P 500 components are higher than they ended 2017, a larger sign of positive market breadth than we saw last year.
Likewise, the S&P is up more than 4% already since the calendar flipped to January. Just to put that into context, the performance the market has shown off in 2018 would put the S&P on track for a triple-digit performance this year if this pace kept up through December.
Of course, that's not going to happen. But big upside potential is showing itself in some of the market's most actively-traded stocks. To figure out how to trade them, we're turning to the charts for a technical look this week.
Facebook is getting hammered today after the company announced major changes to its site, shifting more news feed content back towards posts from friends and family, and away from paid ads and media outlets. Shares are down around 4% as investors worry that the change could mean less revenue.
But Facebook's dip isn't a red flag - it's a buy signal!
Shares are correcting to trendline support, the price floor that's perfectly identified the bottom of Facebook's uptrend going all the way back to last January. Simply put, the last six tests of that price level have provided low-risk, high-reward opportunities to pull the trigger on the Facebook trade. So, as Facebook touches support for the seventh time, it makes sense to buy the next bounce higher.
The stock is up just shy of 1%, after announcing that it would raise its minimum wage to $11 hourly from $9, as well as telling investors that it plans to close more than 60 Sam's Club locations across the U.S.
From a technical standpoint, Walmart's price trajectory is pretty clear:
Walmart has spent much of the last year in a parabolic uptrend, something that most market watchers couldn't have imagined from a big, lumbering stock like Walmart this time last year. Nevertheless, shares are touching their own support line in January, signaling a buy at the exact same time shares make a material move through $100.
Relative strength, the side indicator down at the bottom of the Walmart stock chart, adds some confidence to the upside potential here. The indicator shows that Walmart continues to outperform the rest of the market, even after a nearly 50% upside move in the last 12 months. This latest bounce is buyable.
Boeing, like the other two active stocks on our list today, has been moving up and to the right for more than a year now, ending 2017 as the single best performer in the Dow Jones Industrial Average. After a quiet spell for the first couple of sessions in 2018, Boeing has been back at it, handing investors 13.5% returns year-to-date.
But after moving so far so fast, patience is now a virtue in Boeing.
Make no mistake, Boeing's uptrend is alive and well (and incredibly well defined), but with shares sitting near the top of their range for the second time since this summer, it makes sense to wait for a pullback towards trend-line support before you pull the trigger on this aerospace giant.
On the flip side, if you already own Boeing, the 50-day moving average is a logical place to park a protective stop.
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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.