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Tickers in this Article: TGT, LULU, CSH, HSY
While the jury is still out on whether the markets can sustain a rally from these levels, the technical picture for some stocks is starting to improve. The recent declines left the vast majority of stocks below their 50-day moving averages and put most of them beneath their bases. However, the number of stocks below this level has started to decrease gradually and some stocks are in a position where they could take advantage of benign market conditions. Investopedia Markets: Explore the best one-stop source for financial news, quotes and insights.

For instance, Target Corporation (NYSE:TGT), which has been grinding out a base since early this year, could put itself in a position to break out and cement this base as a bottom. To do this, it would have to sustain a move above the $52 level, which has been acting as stiff resistance. TGT has rallied enough to reclaim its 20, 50 and 200-day moving averages and any strength in the general markets would likely help push TGT out of this base.



Cash America International, Inc
(NYSE:CSH) is a stock that has weathered the recent weakness fairly well. While the decline from its July highs was substantial, it really only retraced approximately 50% of the preceding rally. This is typical behavior in an uptrend and CSH has done nothing more than consolidate at a time when the markets have been weak. Traders should monitor the $57.50, as a break above this area should lead to a retest of its all-time highs near $60.




The Hershey Company (NYSE:HSY) is another stock that has remained in a consolidation despite the recent market weakness. HSY actually attempted to breakout at precisely the worst time (late July, as the market weakness began). While volatility has expanded, HSY has managed to remain in its prior base and has been gradually stabilizing. Traders should monitor it to see if it can clear stiff resistance near $59.




Another stock that could benefit from improving market conditions is Lululemon Athletica Inc. (Nasdaq:LULU). LULU has been a market leader since bottoming in 2009. Each correction has been a buying opportunity along the way and it's possible that LULU is wrapping up its recent pullback. LULU pulled back with the markets in early August and appeared to be in danger of a deeper correction as it experienced wild swings in price. It managed to hold near $45 as support, and is now back above its 50-day moving average. It also cleared a trendline that was marking its recent bounce attempts and could be headed for a retest of its all-time highs near $65.




The Bottom Line
While the technical picture for these stocks has improved a great deal, it is worth noting that they will all likely need some cooperation from the markets. The indexes are not out of the woods yet, and could only be experiencing a mild bounce within a consolidation. However, if this rally attempt sticks, then these stocks are poised to take advantage, as they have already healed from a good deal of the damage suffered over the past month. (For more, see Technical Analysis Introduction.)

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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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