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Zacks Investment Ideas feature highlights: OI Glass, Eagle Materials and Skechers
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For Immediate Release
Chicago, IL – June 16, 2023 – Today, Zacks Investment Ideas feature highlights OI Glass (OI - Free Report) , Eagle Materials (EXP - Free Report) and Skechers (SKX - Free Report) .
3 Top-Ranked Momentum Stocks Ready to Breakout Now
To the surprise of nearly everyone, markets have been extremely strong so far this year. While many analysts had forecasts for a recession and another challenging year for the stock market, the S&P 500 is up 15% and Nasdaq 39% YTD.
Momentum trading is a great way to take advantage of a market that stubbornly continues to grind higher. Momentum trading is the simple concept of buying what’s going up, because there is a good chance that they will continue to go higher. It isn’t just an aphorism either, the momentum anomaly is one of the most researched and implemented trading concepts in markets, utilized by some of the biggest funds in the world.
Aligning Bullish Catalysts
One way to further improve your momentum trading outcomes is to focus on stocks that also have high Zacks Ranks. Trading only stocks with a Zacks Rank #1 (Strong Buy), further improves your odds of buying a winner, because analysts have been upgrading earnings expectations, and large funds use that information to invest.
To improve trading odds even further, investors can buy stocks that also have high probability chart patterns. Utilizing technical chart patterns helps traders rigorously define the entry and exit signals, keeping them out of trades that don’t look right, and getting them in trades with asymmetric risk-reward setups.
We have already seen many of the market leaders breakout and rally significantly, thus they may need some time to rest and reset. However, the market broadly does not look ready to stop rallying, so we will likely see some rotation into less followed names.
I have identified A+ momentum trade setups in OI Glas , Eagle Materials, and Skechers. Each of these stocks earns a top Zacks Rank, has a market beating YTD performance, and looks ready to blast higher based on technical chart patterns.
OI Glass
OI Glass is the largest manufacturer of glass containers in the world. It competes in the glass container segment of the rigid packaging market. The company has 69 glass manufacturing plants spread over 19 countries.
OI produces glass containers for alcoholic beverages, including beer, flavored malt beverages, spirits, and wine. It also produces glass packaging for a variety of food items, soft drinks, teas, juices, and pharmaceuticals. Its glass containers come in a wide range of sizes, shapes and colors and the company remains focused on new product development and glass container innovation.
OI Glass currently boasts a Zacks Rank #1 (Strong Buy), reflecting its upward trending earnings revisions. Current quarter earnings have been revised higher by 10.7% and are expected to grow 14% YoY. FY23 earnings have been upgraded by 23% and are projected to climb 38% YoY.
Sales growth is steady as well. Current quarter sales are projected to grow 4.5% YoY, while FY23 sales are projected to grow 5.5%. The huge growth in earnings relative to the sales is a strong indication that OI is significantly improving business efficiencies. OI Glass has been building out a tight consolidation through most of 2023. After gapping higher at the beginning of February the price has held convincingly above that level. Additionally, we saw price test the bottom of the range yesterday and reverse aggressively higher, printing a nice reversal candle.
If OI can breakout above the $22.50 level, it should move aggressively higher. Alternatively, if the stock can’t hold above the $20.50 level the pattern is invalidated, and the stock can be avoided until building another setup.
Eagle Materials
Eagle Materials manufactures and distributes Cement, Concrete and Aggregates, Gypsum Wallboard, Recycled Paperboard, and Oil and Gas Proppants from more than 75 facilities across the US. EXP manufactures and distributes concrete and aggregates products that are used in highway construction and maintenance and to construct residential and commercial buildings. It operates aggregates quarries and concrete plants in central Texas, northern California, Kansas, and Missouri.
Eagle Materials also sits in the top spot of the Zacks Sector Ranks and the top 6% of the Zacks Industry Rank. EXP has a Zacks Rank #1 (Strong Buy) indicating upward trending earnings revisions. Earnings have been upgraded almost unanimously across timeframes and have been trending higher since mid-2020. Current quarter earnings have been revised higher by 5.6% and are expected to grow 27% YoY. FY23 earnings have been revised higher by 7.9% and are projected to increase 8.4% YoY.
Eagle Materials has built out an extremely tight bull flag over the last few weeks. The tighter these consolidations the better, as decreases in volatility like these eventually lead to explosion in volatility, which propel the stock higher. If EXP can trade above the $169 level, it should rally significantly and push new all-time highs.
However, if the stock trades below $164, investors should be weary as the setup will be invalidated.
Skechers
Skechers, founded in 1992, is an international designer, developer, marketer, and distributor of footwear. Skechers products are available in more than 170 countries with 4,549 stores, including 548 domestic stores, 927 international locations and 3,074 distributors, licensees, and franchise stores.
SKX stock has had a very strong start to this year, rallying 24% in the last five months. SKX has also been a high performing stock over the last decade. Over that period, it has returned 22% annually, more than 6’xing investors’ money, and handily outperforming the broad market.
However, if you look closely at the performance chart below, you will see most of those gains came in the early years of the last decade, trading mostly sideways since 2015. But, based on the current setup, SKX looks like it may be at the start of another major bull run.
SKX too enjoys a Zacks Rank #1 (Strong Buy). FY23 earnings have been revised higher by 7%, and are expected to grow 32% YoY, while sales for that same period are projected to climb 8%.Skechers technical pattern has been building out over a longer period as this is a weekly chart aggregate, while the others were daily charts. I particularly like stocks that build out these momentum continuation patterns right below the all-time highs as it adds fuel to the fire once the stock starts to rally.
If SKX can trade above the $54.75 level, it should blast through the all-time high. But, if the SKX stock can’t hold above the $50.75 level, the setup is invalid, and investors should look for another trade.
Bottom Line
Each of these stocks has a lot going for them, but when trading momentum stocks it is critical to set a trading plan and stick with it. Even the best setups fail, and managing risk is critical, so picking a stop loss and knowing exactly how much you may lose on the trade is the most important decision in trading.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: OI Glass, Eagle Materials and Skechers
For Immediate Release
Chicago, IL – June 16, 2023 – Today, Zacks Investment Ideas feature highlights OI Glass (OI - Free Report) , Eagle Materials (EXP - Free Report) and Skechers (SKX - Free Report) .
3 Top-Ranked Momentum Stocks Ready to Breakout Now
To the surprise of nearly everyone, markets have been extremely strong so far this year. While many analysts had forecasts for a recession and another challenging year for the stock market, the S&P 500 is up 15% and Nasdaq 39% YTD.
Momentum trading is a great way to take advantage of a market that stubbornly continues to grind higher. Momentum trading is the simple concept of buying what’s going up, because there is a good chance that they will continue to go higher. It isn’t just an aphorism either, the momentum anomaly is one of the most researched and implemented trading concepts in markets, utilized by some of the biggest funds in the world.
Aligning Bullish Catalysts
One way to further improve your momentum trading outcomes is to focus on stocks that also have high Zacks Ranks. Trading only stocks with a Zacks Rank #1 (Strong Buy), further improves your odds of buying a winner, because analysts have been upgrading earnings expectations, and large funds use that information to invest.
To improve trading odds even further, investors can buy stocks that also have high probability chart patterns. Utilizing technical chart patterns helps traders rigorously define the entry and exit signals, keeping them out of trades that don’t look right, and getting them in trades with asymmetric risk-reward setups.
We have already seen many of the market leaders breakout and rally significantly, thus they may need some time to rest and reset. However, the market broadly does not look ready to stop rallying, so we will likely see some rotation into less followed names.
I have identified A+ momentum trade setups in OI Glas , Eagle Materials, and Skechers. Each of these stocks earns a top Zacks Rank, has a market beating YTD performance, and looks ready to blast higher based on technical chart patterns.
OI Glass
OI Glass is the largest manufacturer of glass containers in the world. It competes in the glass container segment of the rigid packaging market. The company has 69 glass manufacturing plants spread over 19 countries.
OI produces glass containers for alcoholic beverages, including beer, flavored malt beverages, spirits, and wine. It also produces glass packaging for a variety of food items, soft drinks, teas, juices, and pharmaceuticals. Its glass containers come in a wide range of sizes, shapes and colors and the company remains focused on new product development and glass container innovation.
OI Glass currently boasts a Zacks Rank #1 (Strong Buy), reflecting its upward trending earnings revisions. Current quarter earnings have been revised higher by 10.7% and are expected to grow 14% YoY. FY23 earnings have been upgraded by 23% and are projected to climb 38% YoY.
Sales growth is steady as well. Current quarter sales are projected to grow 4.5% YoY, while FY23 sales are projected to grow 5.5%. The huge growth in earnings relative to the sales is a strong indication that OI is significantly improving business efficiencies. OI Glass has been building out a tight consolidation through most of 2023. After gapping higher at the beginning of February the price has held convincingly above that level. Additionally, we saw price test the bottom of the range yesterday and reverse aggressively higher, printing a nice reversal candle.
If OI can breakout above the $22.50 level, it should move aggressively higher. Alternatively, if the stock can’t hold above the $20.50 level the pattern is invalidated, and the stock can be avoided until building another setup.
Eagle Materials
Eagle Materials manufactures and distributes Cement, Concrete and Aggregates, Gypsum Wallboard, Recycled Paperboard, and Oil and Gas Proppants from more than 75 facilities across the US. EXP manufactures and distributes concrete and aggregates products that are used in highway construction and maintenance and to construct residential and commercial buildings. It operates aggregates quarries and concrete plants in central Texas, northern California, Kansas, and Missouri.
Eagle Materials also sits in the top spot of the Zacks Sector Ranks and the top 6% of the Zacks Industry Rank. EXP has a Zacks Rank #1 (Strong Buy) indicating upward trending earnings revisions. Earnings have been upgraded almost unanimously across timeframes and have been trending higher since mid-2020. Current quarter earnings have been revised higher by 5.6% and are expected to grow 27% YoY. FY23 earnings have been revised higher by 7.9% and are projected to increase 8.4% YoY.
Eagle Materials has built out an extremely tight bull flag over the last few weeks. The tighter these consolidations the better, as decreases in volatility like these eventually lead to explosion in volatility, which propel the stock higher. If EXP can trade above the $169 level, it should rally significantly and push new all-time highs.
However, if the stock trades below $164, investors should be weary as the setup will be invalidated.
Skechers
Skechers, founded in 1992, is an international designer, developer, marketer, and distributor of footwear. Skechers products are available in more than 170 countries with 4,549 stores, including 548 domestic stores, 927 international locations and 3,074 distributors, licensees, and franchise stores.
SKX stock has had a very strong start to this year, rallying 24% in the last five months. SKX has also been a high performing stock over the last decade. Over that period, it has returned 22% annually, more than 6’xing investors’ money, and handily outperforming the broad market.
However, if you look closely at the performance chart below, you will see most of those gains came in the early years of the last decade, trading mostly sideways since 2015. But, based on the current setup, SKX looks like it may be at the start of another major bull run.
SKX too enjoys a Zacks Rank #1 (Strong Buy). FY23 earnings have been revised higher by 7%, and are expected to grow 32% YoY, while sales for that same period are projected to climb 8%.Skechers technical pattern has been building out over a longer period as this is a weekly chart aggregate, while the others were daily charts. I particularly like stocks that build out these momentum continuation patterns right below the all-time highs as it adds fuel to the fire once the stock starts to rally.
If SKX can trade above the $54.75 level, it should blast through the all-time high. But, if the SKX stock can’t hold above the $50.75 level, the setup is invalid, and investors should look for another trade.
Bottom Line
Each of these stocks has a lot going for them, but when trading momentum stocks it is critical to set a trading plan and stick with it. Even the best setups fail, and managing risk is critical, so picking a stop loss and knowing exactly how much you may lose on the trade is the most important decision in trading.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.