First up is electrical component maker TE Connectivity (TEL), a name that's certainly been in the momentum camp in the last year. Over those past 12 months, TEL has rallied more than 42%, besting the S&P 500's climb by a factor of two. Don't worry if you've missed the upside so far -- this stock looks like it has further to run.
That's because the long-term uptrend in TEL has evolved into a textbook ascending triangle pattern, a bullish price setup formed by horizontal resistance above shares at $60 and uptrending support to the downside. Basically, as shares bounce in between those two technically significant levels, it's getting squeezed closer and closer to a breakout above resistance at $60. When that happens, we've got our buy signal.
Relative strength has been looking strong in TEL over the last few months -- and that's critical right now. When the broad market is kicking into corrective mode, relative strength is the single most important indicator you can have in your toolbox.