If it feels like Mr. Market is dragging sideways this spring, you're just looking at the wrong stocks...
That's because, despite a relatively quiet stretch since the S&P 500 peaked back in March, a material chunk of this market is having a banner year in 2017. As I write, approximately 32% of S&P components are already up 10% or more since the start of the year - that's about a third of the stocks in the big index that are sitting on double digit gains year-to-date.
And the good news is that they're just getting started. As we press on in April, some of the biggest stocks on the market are teetering on the edge of breakout territory right now.
To figure out which ones to buy - and when to buy them - we're turning to the charts for a technical look at four mega-cap breakouts that are about to rip higher this spring...
First, a quick note on the technical toolbox we're using here: technical analysis is a study of the market itself. Since the market is ultimately the only mechanism that determines a stock's price, technical analysis is a valuable tool even in the roughest of trading conditions. Technical charts are used every day by proprietary trading floors, Wall Street's biggest financial firms, and individual investors to get an edge on the market. And research shows that skilled technical traders can bank gains as much as 90% of the time.
Every week, I take an in-depth look at big names that are telling important technical stories. Here's this week's look at four big stocks to trade...
Up first on the list is $65 billion consumer products giant Colgate-Palmolive Co. (CL) . Colgate has been a strong performer in 2017, up more than 12% since the beginning of the year. And shares are pointing to a second leg higher in the month ahead.
Colgate has spent the last two months forming a textbook example of an ascending triangle pattern, a bullish continuation setup that signals the potential for higher ground ahead. The pattern is formed by horizontal resistance up above shares at $74, and uptrending support to the downside. Basically, as Colgate pinballs between those two technically significant price levels, shares have been getting squeezed closer and closer to a breakout through that $74 price ceiling. When that happens, we've got a buy signal.
Relative strength, measured by the indicator down at the bottom of Colgate's price chart, adds some extra confidence to upside in shares. That's because Colgate's relative strength line has been in an uptrend of its own since the end of January, 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, CL is predisposed to outperform in 2017.