Charting Three Top Trending Stocks to End August
08/27/2014 7:00 am EST
As a proponent of the concept of “strong getting stronger,” technician Corey Rosenbloom of AfraidToTrade.com 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):
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):
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:
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, AfraidToTrade.com