Home » Watchlist Update: Breakout Stocks for a Mixed Market

Watchlist Update: Breakout Stocks for a Mixed Market

Stocks kicked off last week on a positive note, with the S&P 500 rising 0.8% last Monday.

But on Tuesday and Wednesday, the index gave back all of those gains and then some.

The sudden change of direction came as the market started to anticipate more aggressive tightening action from the Federal Reserve.

But as those fears subsided into the later part of the week, the markets found their footing and started to turn up.

Across the board, the technical picture is still somewhat mixed, however…

Moving Average Mess

The S&P is above both its 50-day and 200-day moving averages (MAs), while the Nasdaq 100 is sandwiched in between its major MAs.

The Russell 2000 is in the worst shape of the bunch, as it is trading below both of its major MAs.

Even worse is that the Russell’s 200-day MA is clearly sloping downward now.

All of this comes as only 48% of the stocks in the S&P 500 are trading above their 200-day MAs.

That’s certainly better than the 29% reading we saw in late February, but it still paints a cautious picture overall.

That doesn’t mean there aren’t good opportunities out there, though.

In fact, today I’m bringing you three more stocks that are pushing up against recent highs and could be ready to break out soon.

Continue reading for all the details…

Sterling Check Corp.

Sterling Check Corp. (STER) is a $2.5 billion technology company focused on background and identity verification services.

Here’s how the chart is setting up…

Daily Chart of Sterling Check Corp. (STER) — Source: TradingView

And here’s how the stock is setting up with my Stock Surge Indicator (SSI)…

  • Surge score: 85/100
  • % Above 52-wk low: 50%
  • Sales growth: +35%
  • Return on Equity: 15%
  • Triple momentum: yes

STER is a recent initial public offering (IPO) from late last year in the later stages of forming its first base.

These IPO bases can be powerful buy points, as I discussed last week.

That’s because the stock will be making its first move higher after the initial volatility has been digested from new investors getting positioned in the stock.

The company has posted big sales and earnings growth over the last several quarters, and analysts have been raising their estimates for 2022.

The trigger to buy would be a move above $28.00.

Xenon Pharmaceuticals Inc.

Xenon Pharmaceuticals Inc. (XENE) is a $1.8 billion biotechnology company focused on treating neurological disorders.

Here’s how the chart is setting up…

Daily Chart of Xenon Pharmaceuticals Inc. (XENE) — Source: TradingView

And here’s how the stock is setting up with my SSI…

  • Surge score: 97/100
  • % Above 52-wk low: 129%
  • Sales growth: -27%
  • Return on Equity: N/A
  • Triple momentum: yes

Xenon is a clinical-stage biotech stock, so fundamentals like sales and earnings aren’t much help in evaluating the trade.

However, the technical picture looks great.

After a big jump in October on positive Phase 2 trial results for its epilepsy drug, shares have consolidated in a tightening pattern from left to right.

I would consider buying if the stock can make new highs.

Ideally, you want to see increased volume on the breakout day as a sign that big institutional investors are behind the buying.

Casella Waste Systems, Inc.

Casella Waste Systems, Inc. (CWST) is a $4.6 billion waste management company serving a variety of customer bases throughout the northeastern United States.

Here’s how the chart is setting up…

Daily Chart of Casella Waste Systems, Inc. (CWST) — Source: TradingView

And here’s how the stock is setting up with my SSI…

  • Surge score: 95/100
  • % Above 52-wk low: 43%
  • Sales growth: +21%
  • Return on Equity: 12%
  • Triple momentum: yes

CWST made a big move in early March, as the stock soared 32% over 10 consecutive up-days.

To me, this was a clear sign of institutional accumulation.

Since then, shares have retraced slightly and formed a shelf at the $90.00 mark.

If the “big guns” are still buying, we should see another leg higher and a move on to new highs.

I’d consider buying if CWST breaks $90.00.

Before I go, if you’d like a step-by-step walkthrough on how to best take advantage of trades like these…

Be sure to check out my recent article, How to Follow My Weekly Trades, to know where I’m buying so that you can follow along.

Want More Stealth Trades?

Stocks like this with heavy institutional buying are what I call “stealth trades.”

I have plenty more trades like this inside my premium Stealth Trades research service.

So, if you’re interested in giving it a try, click here now to view my latest presentation.

Embrace the surge,

Ross Givens
Editor, Stock Surge Daily

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Ross Givens

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