If you're a stock market investor, there's a number you should burn into your mind: it's 112.
That's how many S&P 500 components have officially entered bull market territory in the past six months, rallying 20% or more in that timeframe. Simply put, more than one in five S&P stocks are showing off some stellar outperformance right now.
But don't worry if you've missed out on that spike in stocks; plenty of big stocks are on the verge of new breakout moves this spring.
To figure out which ones look primed to kick off bull market runs of their own from here, we're turning to the charts for a technical look at four that are teetering on the verge of breakout territory ...
In case you're unfamiliar with technical analysis, here's the executive summary: technical analysis is a way for investors to quantify qualitative factors, such as investor psychology, based on a stock's price action and trends. Once the domain of cloistered trading teams on Wall Street, technicals can help top traders make consistently profitable trades and can aid fundamental investors in better planning their stock execution.
Without further ado, here's a rundown of four technical setups that are showing solid trading potential right now ...
DISH Network Corp.
We're starting simple: with shares of $29 billion satellite TV provider DISH Network Corp. (DISH - Get Report) . DISH has been showing traders a price setup that's about as simple as they get: shares have been bouncing their way higher in a well-defined uptrend, bouncing their way to 46% gains in the past 12 months. That uptrend is still very much intact as the calendar rolls deeper into April.
DISH Network's uptrend is formed by a pair of parallel trendlines that have done a good job of identifying this stock's high probability range since last summer. Trendline support, in particular, has been inviolate during the course of DISH's uptrend, signaling a low-risk, high-reward buying opportunity on every successive test of the bottom of the price channel. That means, as DISH touches support for the eighth time here, it makes sense to buy the next bounce higher.
Actually waiting for that bounce is important for two key reasons: it's the spot where shares have the most room to move up before they hit resistance, and it's the spot where the risk is the least (because shares have the least room to move lower before the channel breaks, invalidating the upside trade). Remember, all trend lines do eventually break, but by actually waiting for the bounce to happen first, you're ensuring DISH can actually still catch a bid along that line before you put your money on shares.
Extra Space Storage
Things haven't been quite so strong lately in shares of $10 billion self-storage REIT Extra Space Storage Inc. (EXR - Get Report) . That real estate investment trust has lost about 16% of its market value in the trailing 12 months, underperforming the big stock averages meaningfully in that stretch. But while EXR is down, it's not out--not yet. After rebounding about 14% from its November lows, Extra Space Storage is signaling a potential continuation of its rebound.
For that to happen, resistance up at $79 is the breakout level to watch.
The price setup in Extra Space Storage is an ascending triangle pattern, a bullish continuation setup that implies more upside ahead. The pattern is formed by a horizontal resistance level--the aforementioned $79 level in this case--and uptrending support to the downside. Basically, as shares of Extra Space have bounced in between those two technically important prices, this stock has been getting squeezed closer and closer to a breakout through that $79 price ceiling. When that happens, we've got our buy signal.
From there, former support at $74 becomes a logical place to park a protective stop. If EXR dips back below $74, the ascending triangle in this stock is busted, and you don't want to own it any more ...
We're seeing the exact same price setup in shares of $3.5 billion infrastructure construction stock MasTec Inc. (MTZ - Get Report) . MasTec has spent most of 2017 forming a textbook example of an ascending triangle pattern, ending yesterday's session within grabbing distance of a breakout buy signal. For MasTec, that happens if shares can muster the strength to move through $42.
The supply and demand imbalance that spurs MasTec's breakout through $42 is pretty straightforward. The $42 resistance level is a price where there is an excess of supply of shares; in other words, it's a spot where sellers had previously been more eager to step in and take gains than buyers have been to buy. That's what makes a breakout above $42 so significant--the move means that buyers are finally strong enough to absorb all of the excess supply above that price level.
Relative strength, measured by the indicator down at the bottom of MasTec's price chart, adds some extra confidence to upside in shares. That's because MTZ's relative strength line has been in an uptrend of its own since last summer, an indication that this stock isn't just beating the rest of the sector--it's still beating the rest of the broad market in the long-run. As long as that uptrend in relative strength stays intact, MTZ is predisposed to outperform in 2017. If shares can push through $42 this week, it's a buy.
St. Joe Co.
Last on our list of potential breakout trades is real estate developer St. Joe Co. (JOE - Get Report) . That might seem a little surprising looking at this stock's chart--St. Joe has lost more than 20% of its market value since peaking back in December, resulting in a pretty ugly chart. But JOE is finally looking "bottomy" in April, and shares are back within grabbing distance of the trigger level that could send shares back toward their end-of-year highs ...
The price setup in play in shares of St. Joe is an inverse head-and-shoulders pattern, a classic price pattern that signals exhaustion among sellers. You can spot this price pattern by looking for two swing lows that bottom out at approximately the same level (the shoulders), separated by a lower low (the head). The buy signal comes on a move through St. Joe's neckline--currently at the $17.50 level.
Price momentum, measured by 14-day RSI up at the top of JOE's chart, is the side-indicator to pay attention to in this stock. Our momentum gauge made higher lows over the course of St. Joe's reversal pattern, indicating that buying pressure has been building as the bottom has formed on the price side of things. Wait for shares to materially break out through $17.50 before you pull the trigger on this trade.