After a choppy first few weeks, the stock market appears to now be on steady footing. On Friday, the S&P 500 index broke out from a four-week consolidation, breaking out above 4,800 and to a new intraday high.
With the market showing such robust action, now is the time to start looking for some stocks that appear primed for explosive moves higher. Here I will share three such stocks that are demonstrating strong momentum as well as top Zacks Ranks.
Zillow Group
The most popular online real estate brands on the internet, Zillow Group ZG owns a leading position in a critically important home-buying experience. Zillow Group is currently trading near its most appealing valuation in recent years at 31x forward earnings.
Additionally, the company has begun to see steady earnings estimates upgrades, giving it a Zacks Rank #1 (Strong Buy) rating. Next quarter earnings estimates have risen by 5.4% over the last two months and are projected to grow 11.4% YoY to $0.39 per share. FY24 earnings estimates have increased by 3.1%, and are forecast to climb 32.6% YoY to $1.66 per share.
ZG stock looks to be setting up for a powerful momentum breakout, and I think this is one of the most appealing setups in the market. On Friday, Zillow Group stock cleared the $51.50 breakout level, signaling a buy. If the stock can hold above this level it should push to new highs in the coming weeks.
Alternatively, if the stock breaks back down below the $50 level, investors should wait for another opportunity as the trade will be invalidated.
Shopify
The cloud-based e-commerce platform, Shopify SHOP has steadily grown into a major piece of infrastructure for small and medium sized enterprises. Shopify expected to grow sales by 25% this year and 19% next year.
Along with a litany of other high-growth technology stocks, Shopify has been on a roller coaster over the last few years. We can see that SHOP stock is well off its all-time high, but has still considerably outperformed the broad market, compounding at an annual rate of 38%.
Shopify also enjoys a Zacks Rank #1 (Strong Buy) rating reflecting upward trending earnings estimate revisions. EPS are forecast to grow an impressive 49% next year.
Shopify stock has also been forming a convincing technical bull flag. If the price can close above the $79.50 level it would signal a breakout, and likely push to new highs. However, if it loses the $76.50 level of support, it may be wise to look for other options.
Pinterest
Pinterest PINS, the social media platform with nearly 500 million monthly active users is in my opinion a very compelling stock to consider buying in the current environment. Pinterest is expected to grow its EPS by 36% annually over the next 3-5 years, while also boasting a forward earnings multiple of 28.5x.
This gives it a PEG Ratio of 0.79x, indicating a discounted valuations based on growth estimates.
PINS also has a Zacks Rank #1 (Strong Buy) rating, demonstrated by the upward trending earnings estimates revisions seen in the chart below. With earnings expected to climb in both the coming quarters and years, the company has a multi-timeframe advantage, really improving the odds of the stock rallying.
Pinterest stock has been forming pennants and flags and breaking out steadily since the second half of last year. Over the last five weeks it has built out a clear consolidation, from which it looks ready to break out from.
If PINS stock can breakout above the $38.10 level, it should move swiftly higher. But, if it loses support at $35.60, the setup is broken.
Bottom Line
Until the market proves us otherwise, investors should assume the bull market is going to continue. “The trend is your friend” as they say.
I want to note that it is of the utmost importance that investors who are trading momentum breakout setups like this always have a trading plan and stick to it and to always use prudent risk management.
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Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.
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After a choppy first few weeks, the stock market appears to now be on steady footing. On Friday, the S&P 500 index broke out from a four-week consolidation, breaking out above 4,800 and to a new intraday high.
With the market showing such robust action, now is the time to start looking for some stocks that appear primed for explosive moves higher. Here I will share three such stocks that are demonstrating strong momentum as well as top Zacks Ranks.
Zillow Group
The most popular online real estate brands on the internet, Zillow Group ZG owns a leading position in a critically important home-buying experience. Zillow Group is currently trading near its most appealing valuation in recent years at 31x forward earnings.
Additionally, the company has begun to see steady earnings estimates upgrades, giving it a Zacks Rank #1 (Strong Buy) rating. Next quarter earnings estimates have risen by 5.4% over the last two months and are projected to grow 11.4% YoY to $0.39 per share. FY24 earnings estimates have increased by 3.1%, and are forecast to climb 32.6% YoY to $1.66 per share.
ZG stock looks to be setting up for a powerful momentum breakout, and I think this is one of the most appealing setups in the market. On Friday, Zillow Group stock cleared the $51.50 breakout level, signaling a buy. If the stock can hold above this level it should push to new highs in the coming weeks.
Alternatively, if the stock breaks back down below the $50 level, investors should wait for another opportunity as the trade will be invalidated.
Shopify
The cloud-based e-commerce platform, Shopify SHOP has steadily grown into a major piece of infrastructure for small and medium sized enterprises. Shopify expected to grow sales by 25% this year and 19% next year.
Along with a litany of other high-growth technology stocks, Shopify has been on a roller coaster over the last few years. We can see that SHOP stock is well off its all-time high, but has still considerably outperformed the broad market, compounding at an annual rate of 38%.
Shopify also enjoys a Zacks Rank #1 (Strong Buy) rating reflecting upward trending earnings estimate revisions. EPS are forecast to grow an impressive 49% next year.
Shopify stock has also been forming a convincing technical bull flag. If the price can close above the $79.50 level it would signal a breakout, and likely push to new highs. However, if it loses the $76.50 level of support, it may be wise to look for other options.
Pinterest
Pinterest PINS, the social media platform with nearly 500 million monthly active users is in my opinion a very compelling stock to consider buying in the current environment. Pinterest is expected to grow its EPS by 36% annually over the next 3-5 years, while also boasting a forward earnings multiple of 28.5x.
This gives it a PEG Ratio of 0.79x, indicating a discounted valuations based on growth estimates.
PINS also has a Zacks Rank #1 (Strong Buy) rating, demonstrated by the upward trending earnings estimates revisions seen in the chart below. With earnings expected to climb in both the coming quarters and years, the company has a multi-timeframe advantage, really improving the odds of the stock rallying.
Pinterest stock has been forming pennants and flags and breaking out steadily since the second half of last year. Over the last five weeks it has built out a clear consolidation, from which it looks ready to break out from.
If PINS stock can breakout above the $38.10 level, it should move swiftly higher. But, if it loses support at $35.60, the setup is broken.
Bottom Line
Until the market proves us otherwise, investors should assume the bull market is going to continue. “The trend is your friend” as they say.
I want to note that it is of the utmost importance that investors who are trading momentum breakout setups like this always have a trading plan and stick to it and to always use prudent risk management.
Only $1 to See All Zacks' Buys and Sells
We're not kidding.
Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.
Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.
See Stocks Now >>
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