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Market Melt-Up: 3 Top Ranked Stocks Breaking Out Now
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The stock market is experiencing a melt-up with the S&P 500 up six days in a row and the Nasdaq 100 up seven. In this type of market, momentum trading is one of the most effective ways to ride the trend higher.
Although stock market indexes have traded sideways for nearly five months now, it looks like the year end bull move is ready to begin. The Nasdaq 100, pictured below, just bounced off its 200-day moving average, and moved swiftly back above the 50-day moving average last week.
I believe all the weak longs have now been shaken, and the market now has the green light to finish the year strong. To take advantage of this final leg higher, I am going to share three stocks with top Zacks Ranks, and technical trading patterns to enhance their bullish setups.
Image Source: TradingView
Consolidated Water
Although the utilities sector has struggled over the last couple of months, Consolidated Water (CWCO - Free Report) has been a standout performer, beating both the sector and broad market.
Consolidated Water specializes in providing water treatment and wastewater services internationally. The company is known for its expertise in desalination, which is the process of converting seawater into fresh, potable water.
CWCO operates desalination plants in several locations, particularly in the Caribbean and the Middle East, where access to freshwater sources may be limited. They also offer water distribution and wastewater treatment services, making them a key player in addressing water scarcity and quality issues in the regions they serve.
Consolidated Water enjoys a Zacks Rank #2 (Buy) rating, indicating upward trending earnings revisions. Analysts have bumped earnings estimates higher across timeframes, and notably raised current quarter estimates by 8.3% in just the last two months.
Image Source: Zacks Investment Research
CWCO has been building out a very compelling technical consolidation over the last couple of months. The stock has clearly broken out above the $31 level and looks ready to continue to further new highs. So long as Consolidated Water stock price doesn’t trade meaningfully back below the breakout level, I would expect it to continue higher.
Image Source: TradingView
Meta Platforms
Meta Platforms (META - Free Report) , the parent company of Facebook, Instagram, and WhatsApp, among others has made an absolutely unbelievable move from its 2022 lows. Since then, the stock has more than tripled, but even more amazing is that it still looks relatively cheap after such appreciation.
META is trading at a one year forward earnings multiple of 22.3x, which is well below the industry average and below its 10-year median of 27x. The company is also forecasting EPS growth over the next 3-5 years of 21.3% annually.
Meta Platforms also gets a Zacks Rank #2 (Buy) rating, demonstrating continually upward trending earnings revisions.
Image Source: Zacks Investment Research
The price action in META stock has been forming an increasingly tight bull flag on the weekly chart. I think this is one of the most convincing setups in the market today. If the broad market remains bid. Meta Platforms should lead that move.
If the price trades above $322, it will confirm a technical breakout. Conversely, if the price can’t hold above the $300 level of support, the setup is invalid, and investors will want to wait for other opportunities.
Image Source: TradingView
Nvidia
Everyone knows Nvidia (NVDA - Free Report) has been the best performing stock on the S&P 500 this year, however for many traders this has been a reason to avoid the stock. “It is up too much,” many traders think, but this is the wrong way to look at it.
With the explosion in Artificial Intelligence, and the computing capacity required to power it we are in the midst of a paradigm shift, and Nvidia is leading it. Furthermore, stocks that lead the market in the beginning of the year often go on to finish the year strong as well.
Nvidia boasts a Zacks Rank #1 (Strong Buy) rating and has held that position for more than five months. Not surprisingly, leading the AI revolution earns you some upgrades. FY24 and FY25 estimates have been rocketing higher since mid-April now that investors realize just how many data center products the semiconductor behemoth is going to sell.
Image Source: Zacks Investment Research
Nvidia stock also just broke out from a very clean bull flag. So long as the price holds above this breakout level, it should continue to move higher. I will add that the broad market looks a bit extended here, so this setup may turn out a bit more challenging and should probably be given some room to breathe.
I think so long as Nvidia doesn’t trade below the $400 level, the price action looks conducive to higher prices into year end.
Image Source: TradingView
Bottom Line
There are a lot of positive catalysts building for the stock market into year end. It seems the Federal Reserve is leaning more dovish in recent weeks, inflation continues to slow, and the employment market is loosening in a very reasonable manner. All of this is in line with the soft landing that has been talked about for so long now.
This leads to a bullish bias moving forward, and what better way to take advantage of that than with the leading stocks.
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Market Melt-Up: 3 Top Ranked Stocks Breaking Out Now
The stock market is experiencing a melt-up with the S&P 500 up six days in a row and the Nasdaq 100 up seven. In this type of market, momentum trading is one of the most effective ways to ride the trend higher.
Although stock market indexes have traded sideways for nearly five months now, it looks like the year end bull move is ready to begin. The Nasdaq 100, pictured below, just bounced off its 200-day moving average, and moved swiftly back above the 50-day moving average last week.
I believe all the weak longs have now been shaken, and the market now has the green light to finish the year strong. To take advantage of this final leg higher, I am going to share three stocks with top Zacks Ranks, and technical trading patterns to enhance their bullish setups.
Image Source: TradingView
Consolidated Water
Although the utilities sector has struggled over the last couple of months, Consolidated Water (CWCO - Free Report) has been a standout performer, beating both the sector and broad market.
Consolidated Water specializes in providing water treatment and wastewater services internationally. The company is known for its expertise in desalination, which is the process of converting seawater into fresh, potable water.
CWCO operates desalination plants in several locations, particularly in the Caribbean and the Middle East, where access to freshwater sources may be limited. They also offer water distribution and wastewater treatment services, making them a key player in addressing water scarcity and quality issues in the regions they serve.
Consolidated Water enjoys a Zacks Rank #2 (Buy) rating, indicating upward trending earnings revisions. Analysts have bumped earnings estimates higher across timeframes, and notably raised current quarter estimates by 8.3% in just the last two months.
Image Source: Zacks Investment Research
CWCO has been building out a very compelling technical consolidation over the last couple of months. The stock has clearly broken out above the $31 level and looks ready to continue to further new highs. So long as Consolidated Water stock price doesn’t trade meaningfully back below the breakout level, I would expect it to continue higher.
Image Source: TradingView
Meta Platforms
Meta Platforms (META - Free Report) , the parent company of Facebook, Instagram, and WhatsApp, among others has made an absolutely unbelievable move from its 2022 lows. Since then, the stock has more than tripled, but even more amazing is that it still looks relatively cheap after such appreciation.
META is trading at a one year forward earnings multiple of 22.3x, which is well below the industry average and below its 10-year median of 27x. The company is also forecasting EPS growth over the next 3-5 years of 21.3% annually.
Meta Platforms also gets a Zacks Rank #2 (Buy) rating, demonstrating continually upward trending earnings revisions.
Image Source: Zacks Investment Research
The price action in META stock has been forming an increasingly tight bull flag on the weekly chart. I think this is one of the most convincing setups in the market today. If the broad market remains bid. Meta Platforms should lead that move.
If the price trades above $322, it will confirm a technical breakout. Conversely, if the price can’t hold above the $300 level of support, the setup is invalid, and investors will want to wait for other opportunities.
Image Source: TradingView
Nvidia
Everyone knows Nvidia (NVDA - Free Report) has been the best performing stock on the S&P 500 this year, however for many traders this has been a reason to avoid the stock. “It is up too much,” many traders think, but this is the wrong way to look at it.
With the explosion in Artificial Intelligence, and the computing capacity required to power it we are in the midst of a paradigm shift, and Nvidia is leading it. Furthermore, stocks that lead the market in the beginning of the year often go on to finish the year strong as well.
Nvidia boasts a Zacks Rank #1 (Strong Buy) rating and has held that position for more than five months. Not surprisingly, leading the AI revolution earns you some upgrades. FY24 and FY25 estimates have been rocketing higher since mid-April now that investors realize just how many data center products the semiconductor behemoth is going to sell.
Image Source: Zacks Investment Research
Nvidia stock also just broke out from a very clean bull flag. So long as the price holds above this breakout level, it should continue to move higher. I will add that the broad market looks a bit extended here, so this setup may turn out a bit more challenging and should probably be given some room to breathe.
I think so long as Nvidia doesn’t trade below the $400 level, the price action looks conducive to higher prices into year end.
Image Source: TradingView
Bottom Line
There are a lot of positive catalysts building for the stock market into year end. It seems the Federal Reserve is leaning more dovish in recent weeks, inflation continues to slow, and the employment market is loosening in a very reasonable manner. All of this is in line with the soft landing that has been talked about for so long now.
This leads to a bullish bias moving forward, and what better way to take advantage of that than with the leading stocks.