(Note: The author of this fundamental analysis is a financial writer and portfolio manager.)
The S&P 500 (SPY) is moving higher and appears to be well positioned to advance further in the coming weeks, based on the current technical setup. Shares of The Home Depot, Inc. (HD), Texas Instruments Inc. (TXN), and The Procter & Gamble Co. (PG), could all be set to lead the index higher, based on their current technical setup.
S&P 500 Is Primed to Go Higher
The S&P 500 initially broke out back on May 9, when it rose above 2,685. Now it appears it is breaking out again and may be on its way back to around 2,800, about 2.5% higher than its current level. The chart below shows the S&P 500 rising above a downtrend dating back to May 14, creating a bullish continuation pattern called a symmetrical triangle. With the index rising above the downtrend today, it appears set to advance higher. (For more, see also: Why S&P 500 Stocks May Rebound 6% Short Term.)
Home Depot has been trending higher since bouncing off critical support around $172.50 back in the middle of April. Shares of the stock could rise again towards $203, an increase of about 7%, based on the current setup in the technical chart. There is currently a strong uptrend in the relative strength index (RSI) with a reading around 60. The index would need to rise above 70 before the stock reached overbought levels. (For more, see also: 6 Dividend Stocks Poised for Stellar Payouts.)
Procter & Gamble
Shares of Procter & Gamble also appear to be ready to rebound back to $78.25, a rise of about 6 percent from its current price around $74. The chart shows a large gap was created at the end of April when shares fell from roughly $78 to $75.25 and have managed to find a firm base around $71. Should the stock refill the gap created in late April, it would lead to a retracement to $78.25.
Texas Instruments has broken out, rising above a downtrend at the beginning of May, and shares could be on a path to increase to roughly $121, a jump of about 9.5% from its current price around $110.40. The RSI has been trending nicely higher, since mid-April, and currently sits around 60, well below an overbought level of 70.
Should the S&P 500 continue to advance, these may very well be three of the stocks leading the way higher.
Michael Kramer is the Founder of Mott Capital Management LLC, a registered investment adviser, and the manager of the company's actively managed, long-only Thematic Growth Portfolio. Kramer typically buys and holds stocks for a duration of three to five years. Click here for Kramer's bio and his portfolio's holdings. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future performance.