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Five Large Caps Leading the Way Higher

David Bartosiak

This streak of all-time highs on the day is historic. There have only been three times in history where the Dow made record highs on at least 12 days in a row. One of those times, it made it the lucky number 13 days before finally running out of gas. In a few hours we’ll see if this market can match that legendary streak.

It hasn’t been your typical record run. The days that the market did rally higher were very mild. The average move along this streak has only been 65 points on the Dow. At current levels, that amounts to about 0.3%. The biggest jump wasn’t even twice that, 118.95 points, early last week. The entire streak has added less than 4%.

But hey, 4% to the upside is better than 4% to the downside. And if you told me my large cap portfolio was going to rally 4% over the next two and half weeks, I’d be very happy with that. I’m not downplaying the rally, I’m just giving us some perspective and some hard numbers to think about.

This tepid rally could just be the start of the next leg higher for the market. You don’t want to be the guy that’s on the sidelines watching it pass you by. But you also don’t want to throw money at the first name that pops up on your radar. Here I’ve done the legwork for your next portfolio addition. I put together a list of the top large cap stocks to buy right now. These stocks are Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy) stocks with the best chart patterns to load up on.

Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy) stocks are stocks where the analysts have been revising their earnings estimates to the upside. These analysts follow these companies religiously and often times have insights that the average investor simply could never have. Not because the Average Joe can’t put in the work these analysts do, but because analysts have access to companies that the Average Joe simply does not. We can lean on this expertise to find stocks with the most bullish undertones. Couple that with some technical analysis to find the stocks on the move and you have an explosive formula for success.

Here are five stock ideas I’ve come up with for you to investigate further:

Applied Materials (AMAT)

Applied Materials, Inc. provides manufacturing equipment, services, and software to the semiconductor, display, and related industries worldwide. It operates through three segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. 

This stock has been a runaway breakout success for the last year plus. This most recent run really began in November when the stock leapfrogged the 50-day moving average. From there shares have gone from under $30 to $36.22. During that run, the commodity channel index has only dipped below the zero line once.  

Alibaba (BABA)

Alibaba Group Holding Limited, through its subsidiaries, operates as an online and mobile commerce company in the People's Republic of China and internationally. It operates Taobao Marketplace, an online shopping destination; Tmall, a third-party platform for brands and retailers; Juhuasuan, a sales and marketing platform for flash sales; Alibaba.com, an online wholesale marketplace; Alitrip, an online travel booking platform; 1688.com, an online wholesale marketplace; and AliExpress, a consumer marketplace. 

Alibaba has had a series of trending phases followed by periods of consolidation. The recent action following its last earnings report is a clear consolidation with the stock bouncing between $100 and $105. I’d be looking to buy a breakout from the top of the consolidation range in the hopes of catching the next leg higher.

Salesforce (CRM)

salesforce.com, inc. provides enterprise cloud computing solutions, with a focus on customer relationship management to various businesses and industries worldwide. It offers enterprise cloud computing applications and platform services, including Sales Cloud that enables companies to store data, monitor leads and progress, forecast opportunities, gain insights through relationship intelligence, and collaborate around sales on desktop and mobile devices. 

CRM has pretty much been locked in a trading range from $66 to $84 for most of the last year. You may feel like you just missed out on a big more from $67.50 to $82. The CCI has come down from over 100, indicating an overbought condition, to just below the zero line at -16. In the short run that could mean a sell signal here for CRM. I’d wait to see if it bounces here as the CCI bounce on the zero line has been a pattern I’ve traded with some success over the last several months.

D.R. Horton (DHI)

D.R. Horton, Inc. operates as a homebuilding company. It engages in the acquisition and development of land; and construction and sale of homes in 26 states and 78 markets in the United States under the names of D.R. Horton, America’s Builder, Express Homes, Emerald Homes, Regent Homes, Crown Communities, and Pacific Ridge Homes. 

DHI is on the run after bouncing off a triple bottom near $27. The move today is retesting the January high. If the stock breaks out from this level it will likely get to the 52-week high near $34.50. This is probably the most timely of all the trades outlined here today.

Ross Stores (ROST)

Ross Stores, Inc., together with its subsidiaries, operates off-price retail apparel and home fashion stores under the Ross Dress for Less and dd’s DISCOUNTS brand names in the United States. It primarily offers apparel, accessories, footwear, and home fashions.

ROST has been consolidating just below the 52-week highs here. The CCI has cooled off a bit to touch the zero line. I’d be looking to buy a breakout on volume that’s anything at or above average.

Bottom Line

Combining the underlying bullishness of increase EPS estimates with great chart set-ups you can put yourself in a great position to succeed in the market. Hopefully the large cap rally can continue on Wall Street. If it does, these large cap stocks are poised to extend their gains.



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