Even with the volatile U.S. stock market in 2011, which ultimately didn't finish far from where it started, some stocks did exceptionally well. As we begin 2012, the stocks that performed well last year still present opportunities going forward. The following stocks are up more than 45% over the last year and deserve a look to see what opportunities and risks await these stocks in the New Year.
Biogen Idec (Nasdaq:BIIB) has had a great 2011, up 63.76% to $110.05, from $67.20 one year ago. The stock could perform well in early to mid-2012 and the stock is currently consolidating in a continuation pattern. A rise above $116 (will decrease slightly over time) will break the symmetric triangle chart pattern to the upside, providing a target of $131. On-balance volume is rising, indicating continued buying interest in the stock. A drop below the November low of $106 is likely to be short-term bearish. The stock has been in an uptrend since mid-2010 and that long-term trend will continue as long as the price stays above $95.
Valeant Pharmaceuticals (NYSE:VRX) made some big price swings this year, and has still managed to be up 61.84% from one year ago to $46.69 from $28.85. The stock is well off its high at $57.24 made in July, but is currently moving to the upside again. Former support between $48 and $50 is now likely to act as resistance. If the stock can push through this area it will have a bit of room until the $54 to $57.24 resistance area. If the stock moves through the high at $57.24 the initial target is $60 but could go up to $75 if the aggressive uptrend continues. A drop below $41 is a warning signal as there is little support until $32. A rise above $47.58 (December 2 swing high) should be accompanied by rise in the flat-lining on-balance volume indicator. (For more, see 5 Strong Stocks Poised For A Breakout.)
VF Corporation (NYSE:VFC) is up 47.05% from a year ago to $126.99 from $86.36. Recently the stock has been moving sideways between its high at $142.50 and $125.50. Ideally, this range should hold, with a buying opportunity near the low end of this range; stops can be placed below $125. Further support is at $115.50 and can also be used as a stop level. A break above $142.50 has an upside target of $159.50. The stock has been in an uptrend since late 2008. Of concern is that on-balance volume has broken to the downside, helped along by a big volume down day on December 16. This indicator should be watched because a rise in price should be accompanied by a rise in the indicator. A drop below $125.50 sets up a potential bearish pattern called a double top. (For more, see Analyzing Chart Patterns: Double Tops.)
China Unicom (NYSE:CHU) is up 46.74% YTD to $21.13 from $14.40. The stock has been well support by the trendline, currently intersecting just above $19, but the $20 area has been very strong support throughout November and December. As the price moves between $21.75 and $20, buying near the low end of this range presents a buying opportunity with stops below $19. If the stock breaks above $21.75 the initial target is $23.50, followed by $26.50 over the longer-term. Before this can occur, the stock will need to clear its $22.50 high from September. A drop below the 200-day moving average will create a head-and-shoulders topping pattern, indicating bearishness if it occurs. On-balance volume has been moving horizontally, which is a concern. If the price moves higher OBV should confirm, if it doesn't it is a sign of underlying weakness.
The Bottom Line
Even in volatile market conditions there is a trend somewhere. These four stocks had a strong year in 2011, even while the broader market was very near flat for the year. Even though these stocks are up more than 45% in the last year, buying opportunities are still present. Ultimately, these stocks will need to clear resistance to potentially hit the profit targets. Indicators can be used to confirm these price movements higher, should they occur. As always, support levels should be watched, as a drop below these important levels is likely to mean at least short-term bearishness. (For more, see Analyzing Chart Patterns.)
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At the time of writing, Cory Mitchell did not own shares in any of the companies mentioned in this article.