Charting Three Top Trending Stocks to End August

08/27/2014 7:00 am EST


Corey Rosenbloom

Founder and President, Afraid to Trade

As a proponent of the concept of “strong getting stronger,” technician Corey Rosenbloom of highlights three strong, overextended stocks that underscore the principle of trend following.

I’m a big fan of the concept of “Strong Getting Stronger,” and three such stocks stand out as strong candidates.

All three names are overextended so these aren’t instant-buy candidates, but they do underscore the principle of trend following (as opposed to fighting a trend).

Let’s take a look at three strong, overextended stocks as we end August.

US Steel (X):

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I’ll just do a quick highlight of these stocks and allow you to compose your own analysis and spot potential entries as they develop.

US Steel broke above the $28.50 horizontal resistance (rectangle) area with a strong impulse candle (on high volume and momentum) and continued the uptrend higher on a straight-up impulse toward the $40.00 per share region.

We’ll focus attention on the $40.00 level here.

Next is Southwest Airlines (LUV):

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Southwest Airlines has been a relentless uptrending stock, trading (almost) straight up from the $14.00 level low at the end of 2013.

The best spots to enter strongly trending stocks are pullbacks (retracements) or breakouts.

At this point, LUV is more likely to pullback/retrace than to extend its strong rally but don’t count this stock out.

Finally, Gilead (GILD) may be an aggressive candidate:

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GILD now faces a major decision point.

Price traveled higher like a rocket into space from the breakout above $95.00 that continued without ceasing above $100.

By Corey Rosenbloom, CMT, Trader and Blogger,

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