During bull markets, it’s not hard to find strong uptrend stocks. However, identifying such names during bear markets is a completely different story. In bear markets, the rallies do not tend to last as long, breakouts fail constantly, and the number of stocks that are experiencing high-quality moves decline considerably.
What exactly is an uptrend? Specifically, it’s a technical development in a stock during which the price makes a series of higher lows, meaning each dip is shallower than the previous downturn. Ideally, uptrends also feature a series of higher highs that are above the stock’s short- and long-term moving averages.
The more of these criteria that a stock meets, the stronger its uptrend. For instance, a stock can be in an uptrend, while simultaneously being below its resistance and/or its major moving averages. That situation is not ideal.
We want the strongest of the strong. We want to identify all of the names that are trading above their resistance levels and key moving averages. With that approach, we will have the best strong uptrend stocks to pick from. Let’s look at five such names.
|Invesco Solar ETF
T-Mobile (NASDAQ:TMUS) has been the leading telecom stock over the last several months. While the telecom sector is not typically popular with traders — generally, it’s a space that’s embraced by investors — one cannot deny how well T-Mobile has traded lately.
That’s particularly true given the bearish action of AT&T (NYSE:T) and Verizon (NYSE:VZ). When these companies were slashing their guidance a few weeks ago during their quarterly earnings reports, T-Mobile was raising its outlook.
That spurred a post-earnings breakout by TMUS stock over the $139 area, kickstarting a new uptrend. With any luck, T-Mobile stock will see a pullback to the $138 to $140 area, where it will not only retest the prior breakout area, but also retest its 10-week moving average.
Analysts, on average, expect the company to deliver steady, low-single-digit-percentage revenue growth this year and next year, and roughly flat earnings growth in 2022. However, with T-Mobile’s fiscal year already halfway over, investors are looking forward to 2023 when its earnings are forecast to jump from about $2.30 a share this year to almost $6.50 a share next year.
Alongside a rally by the stock market, such a profit surge could fuel further gains by T-Mobile stock.
The healthcare space has attracted many bullish buyers lately, creating a number of strong uptrend stocks.
Of those stocks, Centene (NYSE:CNC) is one that investors should pay attention to. The shares recently hit new all-time highs, as the stock is up 32% from its mid-June low and is trying to rally for the eighth straight week.
Despite the company’s $55 billion market capitalization, it’s not a name that’s particularly well-known. Its lack of fame is probably one reason why it has been able to have so much success lately.
While Centene has been in a strong uptrend over the last two months, it has also had an impressive run over the last few years. On the weekly chart above, notice the way that the shares have found support at their 200-week moving average.
Recently, Centene’s decline ended at its 50-week moving average, launching a multi-week surge. I don’t know if we’ll get a dip to the 10-week moving average and the $90 area. But if we do, let’s see if the buyers step in again.
Enphase Energy (ENPH)
The entire solar group has been trading incredibly well. Enphase Energy (NASDAQ:ENPH) is the stock that kickstarted the move when it reported its quarterly earnings on July 26. The company’s strong results, coupled with its impressive guidance, led to a one-day rally by ENPH stock of 17.9%. Over the last month, ENPH stock has surged 52%.
Invesco Solar ETF (TAN)
With a 12.5% weighting in the Invesco Solar ETF (NYSEARCA:TAN), Enphase is the largest single holding in the fund. Consequently, the TAN ETF has been trading quite well, too. Indeed, it has quietly broken out, eclipsing its downtrend resistance, and it continues to ride its short-term uptrend higher.
First Solar (FSLR)
First Solar (NASDAQ:FSLR) has also been trading incredibly well. The shares are trading at their highest level in more than eight months. Like Enphase, First Solar delivered a strong Q2 report.
Not only did First Solar surpass analysts’ average earnings and revenue estimates, but it raised its full-year revenue outlook, while its earnings and revenue guidance came in ahead of analysts’ mean estimates. Finally, First Solar’s CEO has been buying FSLR stock recently.
Of course, it also helps that the Biden administration is strongly in favor of solar energy.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.