In the last 12 months, the S&P 500 has risen nearly 18%, a strong performance if you compare it to different yearly time frames for the previous five years. Having the S&P 500 as one of the main benchmarks to assess the overall health of the U.S economy, we can find a vast variety of stocks that greatly outperform and underperform this index. The following four large cap stocks have considerably outperformed the S&P 500 and their returns are in in excess of 70% or more in the last year.
Vipshop Holdings Limited (VIPS), an online Chinese discount retailer, is up more than 400% over the last year. The stock has clearly respected the 50-day moving average, only dropping below for brief periods between April and May 2014. A potential entry point investors could consider is if the stock price experiences a pullback at $175. The price reached $201.50 on July 2, 2014, retreated, and is pushing toward that level again. A break above that price could signal another short-term advance, keeping the long-term uptrend healthy.
Another excellent performer over the last year is Micron Technology Inc. (MU,) which jumped more than 140% since July 2013. Minor pullbacks have respected the 50-day moving average. A deeper pullback, like the one seen in March and April 2014, breached the 50-day but stayed well above the 200-day moving average. Therefore, a pullback to the 50-day moving average provides a potential entry area, with a stop loss not too far below. The stock made a $34.50 high on July 1, pulled back and is now testing that high again. A break above keeps the long-term uptrend healthy and indicates another short-term advance.
Facebook, Inc. (FB) is up more than 150% over the last twelve months. That all came earlier in the year, though, as the stock has struggled since putting in a March high at $72.59. The stock remains above its 200-day moving average, and technically the uptrend is still intact as the price has been making overall higher swing highs and higher swing lows. If the price falters here, and is unable to make a new high, then a drop back below $60 (which is near the 200-day moving average as well) means the stock will likely enter a downtrend.
American Airlines Group Inc. (AAL) is up more than 70% over the last year, and after consolidating through much of June and July of 2014, is pushing back towards a resistance of $44.88. Given the overall uptrend, a break above the resistance and out of the consolidation sets up another likely advance for the stock. If the current consolidation sees a downside break--a drop below $37.90, it is likely the stock price will not continue an uptrend. Given that this area was already tested this month, a move higher is more likely than a drop below this area.
The Bottom Line
These stocks have been strong for the last year, and continue to exhibit strength and potential for more upside. The one exception is possibly Facebook. While the uptrend remains intact, there hasn't been any progress since March 2014 and moves higher have been more feeble than the advances seen earlier in the year. Having already seen exceptional gains, there isn't really any reason to bail on these stocks just yet.
VipShop Holdings, Micron Technologies and American Airlines are all pushing at resistance, with a break higher indicating more gains, at least in the short-term.
It is recommended to always have an exit strategy for taking profits, possibly placing a stop below a recent low, or just below a moving average that has been tested during the uptrend.