| Tickers in this article: FB, CCL, PAYX, IDTI There are a number of ways to determine stock strength, including comparing percentage gains of a stock to a benchmark such as the SPDR S&P 500 (SPY). Using that benchmark, the stocks below have all outpaced the S&P 500 over the last month, quarter and year. Another determination of strength is whether a stock is continually creating higher highs. A stock reaching new highs is a sign of strength, especially when the S&P 500 is trading below its prior high(s). The stock is showing relative strength compared to the whole market, and that's a good thing, but doesn't mean it deserves an instant purchase. Based on these criteria, the following four stocks are all strong. Here are some places to consider getting in.
Facebook, Inc. (FB) was hit hard on August 24, going negative for year, but only for a brief time. Since hitting a low of $72 on that day, the stock has surged, recently hitting a fresh all time high of $110.65 on November 5. If looking for an entry, consider minor support at $99 to $98. The price gapped higher from that region on October 24, and it's also former resistance from July (which could now act as support). Support from a rising trendline kicks near $90. Investors looking to hold out for a better long-term buy location may wish to wait for the price to pullback into that region. Buying near $110 may work out, but based on the long-term trend channel the price is currently near the top of it, indicating a pullback to a better entry price is likely.
Refine Your Financial Vocabulary Sign up to receive our FREE Term of the Day newsletter. Gain a better understanding all things financial with technical and easy-to-understand explanations. Click here to begin developing your financial language with this daily newsletter. Disclosure - At the time of writing, the author did not own shares of any company mentioned in this article.
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