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Tickers in this Article: THS, TNS, LO, GCOM
After a strong day in the markets I typically expect to see a lot of bullish looking candles during my chart review session. It's funny how one huge candle can make an ugly chart suddenly look promising. Of course a single day typically isn't enough to change the trend in a stock, and the vast majority of stocks remain in a precarious position. Investopedia Markets: Explore the best one-stop source for financial news, quotes and insights.

However, while running through my screens, I was a little surprised to find a few decent looking charts on the long side. While I don't expect yesterday's reversal to ignite a new rally, the possibility of stocks trading higher for a few days is not absurd. If the markets can actually get something going here, then stocks that have avoided the recent destruction could follow through higher.

Treehouse Foods, Inc. (NYSE:THS) for instance has been unfazed by the past few days of weakness in the markets. It cleared the $60 level after a several month long consolidation. The rally off the bottom of the base the past few weeks has been impressive and THS has held on to most of the gains despite the unfavorable environment. In fact, THS is acting bullishly by starting to flag just above its base. Any strength from these levels would surprisingly take THS to new all-time highs.




Lorillard, Inc. (NYSE:LO) is another stock that has held near all-time highs despite the recent weakness in the markets. The number of stocks near all-time highs is tiny right now, and any stock in this position has to be respected. Maybe it's even more surprising to find a cigarette company showing this kind of strength, but LO has been extremely resilient in this environment. A trader would never suspect a weak market simply by examining the chart for LO. It has been consolidating after a sharp rally this spring, and has been trading in a tight range for the past several weeks. LO has been holding between its 50-day moving average near $105 and $115 above. Any close above $115 could signal a breakout in the stock.



TNS, Inc.
(NYSE:TNS) may not be near all-time highs, but it has also been showing great relative strength over the past few weeks. It rallied very sharply in late August after threatening to breakdown just a few sessions earlier. TNS has now started to flag above its August highs and was not impacted by the past few days of selling in the markets. It's possible that TNS is starting to emerge from the bull flag it has been forming.




Globecomm Systems Inc. (Nasdaq:GCOM ) is another stock that has been showing some relative strength recently. While the chart for GCOM isn't as bullish as the charts above, GCOM has made some progress the past few weeks. After pulling back in late July, it traded sideways between $11 and $13 for a month. After a couple of shakeouts, GCOM broke above this range introducing the potential for a bottom being in place. The stock is now flagging as it pulls back to test the $13 level and could confirm the bottom if it cleared the flag.




The Bottom Line
While the markets are likely still headed lower, traders should always prepare for the surprise scenario. The markets may attempt a rally from these levels, and stocks that have been showing strength would be a good place for traders to focus on. If the markets do rally, then these stocks will likely follow through to higher prices. While the more likely scenario is for the markets to continue struggling, at least these stocks have already proven themselves and should be more sheltered from the weakness. In fact, it's doubtful they would even trigger if the markets continue to deteriorate. However, the key is to have options ready to go in order to react to whatever unfolds in the coming days. (For more, see Technical Analysis: Introduction)

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Charts courtesy of stockcharts.com

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

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