2013 is in the books, with the Dow Jones Industrial Average ETF (ARCA:DIA) returning just under 30%. While many stocks continued to trend higher from earlier gains in 2012, others saw massive turnarounds after weak 2012 performance. These four stocks were hit hard in prior years but surged to upside, more than 100%, in 2013. With a solid year in the books, here's the technical outlook for these stocks going forward.
Boston Scientific (NYSE:BSX) was struggling to get above $6 at the start of 2013, but closed out the year at $12.02 after reaching a high of $12.48. Since mid-September the stock has been moving predominantly sideways. A shallow head and shoulders patten occurred late in the year, broke lower, but failed to follow through to the downside, indicating buyers still have the upper hand. A rally above $12.50 is likely to attract additional buyers with targets at $13 and $13.50. The rallies in late 2013 weren't as strong as the earlier waves higher, so it's possible the stock is losing steam. A drop below $11 creates a topping pattern, with a downside target of at least $9.50.
Best Buy (NYSE:BBY) was up nearly 400% when it hit $44.66 in November, from trading below $12 in late 2012. The stock fell off the high late in 2013, indicating some short-term weakness but is still in an overall uptrend. If the price drops below $38 look for extension to $36. Some traders may be viewing the drop through the $39 to $38 area as a breach of a head and shoulders pattern, indicating a longer-term decline into the $30 region. On the other hand, if the price holds above $38, and then rallies above the $42, it is likely to test the high. A move beyond $44.66 indicates another wave higher and a target of $47.50.
Genworth Financial (NYSE:GNW) more than doubled in 2013, continuing a rally which began in late 2012. Closing out the year at $15.53, just off the $15.78 yearly high, indicates buying is still strong and the trend remains up. Currently there aren't signs of a weakness, although a drop below recent lows at $14.65 indicates a small consolidation (expectation is still up) or a short-term correction is underway. If the price pullbacks to $13.60 it could still be a larger consolidation (expectation still up), but if it drops much below $13.60 a deeper pullback is likely into the $11.60 area. Upside target are at $16.50 and $17.15 for the next waves higher, assuming support isn't broken first.
Netflix (Nasdaq:NFLX) was below $100 at the start of the year, and proceeded to hit a high of $389.16 in October on a price spike. Since then the price has been clawing back toward that high, closing out the year at $368.17. Overall there aren't reversal signals yet. The trend remains up, moving in small waves since November. In the short-term a drop below $351 indicates a deeper correction. For the uptrend to remain strong pullbacks ideally should stay above $320, and a drop below $307 signals a topping pattern is likely in place. Next upside target is the high, followed by $410 assuming support is broken first.
The Bottom Line
2013 is done and it was a very strong year for the major stock indexes. These four stocks saw massive turnarounds and aggressive buying in 2013. Each presents unique opportunities and risks heading into the new year. While these stocks (and the indexes) have seen a strong run, risk should always be managed and an objective approach taken instead of getting involved in hype.