Editors' pick: Originally published Nov. 8.
Here are four stocks to watch with strong technical momentum that you should watch.
Finisar had a beautiful move from June, when it was trading at $15, to early October, when it got to more than $30. The stock has had a 3-wave corrective pullback since then, although it is starting to move up. On Monday, it rallied 60 cents to $28.81 on 1.2 million shares on no news, edging during the session above the declining tops line of the pullback channel. A move across $30.00-$30.15 could lead to a run to the channel top in the mid-$30s.
This stock has had a nice snapback in recent sessions off its pullback from its mid-October high at $7. The stock popped on Thursday after the refrigerant services company beat third-quarter forecasts when reporting Wednesday. The stock had an inside day Friday, and popped again on Monday, up 54 cents, or 8.6%, to $6.82, on 1.2 million shares traded. A move through Monday's intraday high in the $6.95-$7.00 range should get the stock to $7.75 next, followed by $9.00-$9.50.
3. Gigamon (GIMO)
This stock has been a favorite of ours since it broke out in June in the mid-$30s, got up to near $56 in late September, before pulling back and testing the channel bottom near $45. The stock has since bounced, flagged, and then Monday broke out of the flag, gaining $3.80, or 7%, to $57.85 on 1.2 million shares on no news. Watch for this stock to make it up to the channel top at about $65 in the short term.
4. Swift Transportation (SWFT)
Swift broke out of a mini-flag on Monday, gaining $1.08, or 5%, to $23.86, on 2.6 million shares traded. The stock, in a rising channel off its June low at $14.31 -- and with a great angle of ascent and good technicals like On Balance Volume -- looks poised to test the highs from August 2015 in the $24.75-$25.00 zone. If it can punch through there and run, watch for a move to next lateral resistance from March 2015 near $28.