The 5 Dow Stocks Charging to New 52 Week Highs

Nov 11, 2015: 12:02 PM CST

Of the 30 stocks in the popular Dow Jones Industrial Index, five strong companies are breaking to new 52-week highs (and in some cases, all time price highs).

Let’s shine a spotlight on these strong companies and note opportunities in these stocks.

General Electric (GE):

GE continues an uptrend though 2014 was a stagnant, flat (range-bound) year.

PRice broke higher only to trigger a violent Bear Trap into August ahead of an enormous rally on surging bullish volume.

Price broke above the $30.00 per share level to new highs and rests there currently.

It’s overbought/over-extended on its weekly chart but the general strategy is to buy pullbacks on retracements as this stock could continue its strength beyond $30.00.

Home Depot (HD):

Unlike GE, Home Depot (HD) had a stellar 2014 as price broke from a base ($80.00 per share) into a powerful uptrend toward $120.00.

Price retraced through most of 2015 and completed two impulsive (bullish) phases from two retracements.

Remember, we prefer to buy shares in strong trends as price retraces to a key moving average.

Shares are overextended and likely ripe for another pullback (retracement) but at the moment, Home Depot is trading into brand new highs.

McDonald’s (MCD):

McDonald’s is a stock not known for powerful uptrends or stellar swing trading opportunities, but late 2015 saw a huge interest return to this stock with the breakout firmly above $100.00 per share.

After building a multi-year base, shares crest above $100.00 into a momentum and volume-fueled breakout to continue the uptrend.

Shares just pushed through to new highs but also remain overextended above $114.00 per share.

It’s another stock that requires caution into a strong bullish impulse (overextended from moving averages).

The Travelers Companies (TRV):

This is the type of steady, stable uptrending price action we like to see!

Shares continued a series of higher highs and higher lows amid rising moving averages from 2013 into 2015.

Price broke this pattern mid-2015 with a lengthy consolidation and break under the 50 EMA but buyers rushed in powerfully with the September to November impulse.

Price surged from the $95.00 level to the current $115.00 peak and – like the other stocks – extended beyond the “gravitational” moving average near $105.00 currently.

Simply study the mid-2014 and late 2014 breakouts to see similar strong upside swings that gave way eventually to retracements back to the 50 week EMAs (your spot to buy shares; not now).

Finally Visa (V):

If Travelers (TRV) gave us a strong uptrend, Visa (V) gives us a stronger one!

Shares continue to trade higher in an impulsive yet stable uptrending action as price and the moving averages are pulled higher.

2014 saw a triangle consolidation ahead of a big breakout and price has continued the uptrend.

Visa pushes the $80.00 per share level which is a fresh new uptrending high.

In all of these five strong stocks, we’re seeing overextended price action in the trending strength.

“That which is strong tends to get stronger” but that doesn’t mean we rush in and buy JUST because a stock is strong.

Buying breakouts is an aggressive strategy but the safer tactic is to note strong stocks and buy them on retracements to “magnet” or support levels such as Fibonacci or Moving Average price points.

Keep these names as buy candidates and watch those pullbacks!

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Corey Rosenbloom, CMT
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