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Tickers in this Article: COST, IMAX, DGX, EL
One of my most simple yet effective stock screens is to scan the market for stocks near all-time highs. Stocks that are trading close to all-time highs have very little resistance above, as the majority of traders are showing a profit. With most traders sitting on gains, there is little urgency on the part of longs to sell on any weakness. In this case, the only traders who may be in pain are short sellers or traders who may have missed the opportunity to get long. Despite the weakness shown in the markets over the past two weeks, there are several stocks hanging out near all-time highs that could continue their trends on market strength.

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Costco Wholesale Corporation (Nasdaq:COST) for example, surged to new all-time highs a couple of weeks ago after clearing a base it had been consolidating in. Costco stock has been trading sideways near the breakout area since then, and has refused to close under $76. COST is worth watching, as it is showing good support just under all-time highs. A break above the recent range should lead to another push to new highs. (For more, see Support And Resistance Zones.)


Source: StockCharts.com


Estee Lauder Companies (NYSE:EL) is another stock that is consolidating near all-time highs. Technically speaking, EL has not cleared its base but the recent price action is quite promising. EL has been trading in a very tight range just under critical resistance near $95-$96. Much like COST, EL has found buyers waiting the past few days on market weakness and is worth watching on any strength that carries it above its base.


Source: StockCharts.com


Imax Corporation (NYSE:IMAX) is also just under all-time highs, although there are some differences in this chart compared to the last two. While COST and EL are just under recently triggered all-time highs, IMAX is contending with highs set back in 1999. IMAX spent three years trying to get over the mid $30s in the late '90s before a dramatic collapse that took IMAX down to under $1 per share as the bubble burst. It has taken a long time, but IMAX is back to these levels and traders should certainly monitor this situation.


Source: StockCharts.com


Quest Diagnostics Incorporated (NYSE:DGX) is another stock that is consolidating just under all-time highs it set years ago. DGX has actually been trading in a very long consolidation stretching back to 2005. The top of this range is just under $65, but a close above its recent highs near $59 could trigger some buy stops that would put the high mark in play. With earnings slated for tomorrow, the catalyst may be there for such a move.


Source: StockCharts.com


The Bottom Line
The path of least resistance is certainly higher for stocks trading at all-time highs. Each of these stocks is trading near all-time highs despite market conditions that have been persisting since February and can at best be referred to as "neutral". There are no guarantees that the markets will continue to head higher in the near term, but if there is any market strength, these stocks may continue pressing to fresh all-time highs. I can't think of a better place I'd want my stocks to be! (For more, see Buy High, Sell Much Higher.)

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At the time of writing, Joey Fundora did not own shares in any of the companies mentioned in this article.


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