Trend Following Trade Ideas for June 2017:
Well, what can I say? Just another week in the bull market of 2017. Everywhere you look, stocks are breaking out.
But don’t take my word for it. All the major indices finished the month of May strongly in the green (especially the Nasdaq!)
FinViz.com tracks over 7,000 stocks and ETFs. And we closed the first trading days of June 2017 with over 1,000 of them hitting new 52-week highs. Wow!
Pretty impressive, isn’t it? I can’t recall the last time I saw this many stocks pushing the averages higher.
And that’s in stark contrast to the everyday headlines that only FAANG stocks are moving higher. Give me a break!
There’s plenty of upside out there. Again, FinViz shows most sectors have been performing well. Financials and basic materials are the exceptions:
So once again, we’re in the enviable position of having too many trade ideas! I’ll show you some of my favourites below.
But I encourage you to scan the 52-week highs for more breakout picks. After all…
There are plenty of stocks that probably meet your other trading criteria too, whatever they may be. So why not try to make hay while the sun is shining bull is running?
All that said…
I’m still a little perplexed by the strength in bonds. Maybe it’s just USD weakness. But typically this strength in bonds would be a risk-off sign.
Take a look at what I mean:
Can you see how bonds might be cementing a bottom? That’s why I’m feeling a little more cautious than usual.
… Especially because financials are looking a little precarious:
But at the end of the day, this is all academic.
Because no matter what…
I’ll stick to my trading system, be careful with position sizing, and always have a plan for when to sell.
So with that in mind, let’s get in to the stock picks…
Trend Following Trade Ideas For June 2017 (Part 1):
Alright, let’s get to the charts. Because as I mentioned, there are a plethora of breakout stocks waiting to be analyzed.
So below I’ll show you some of my favourites. And don’t miss out on my existing open positions either. As many of them are still running hot.
But more on that later.
Let’s start with the healthcare sector. Because as I see it, the XLV ETF has broken out, after a nearly two-year consolidation.
Here’s the big-picture chart:
Now, I know it might feel like you’ve already missed the move. But what if XLV is setting up for a multi-year uptrend? Maybe that’s crazy.
But… always remember…
“ANYTHING is possible in the stock market!”
So I’d be curious to pick up XLV around here with a stop at about $74.20. If you want to dig deeper in that space, here’s a screen showing healthcare stocks at 52-weeks high.
I’ve been riding the pharma, biotech and healthcare wave in BAX, ISRG and LMAT. But…
One of the other names that stands out to me is Quest Diagnostics. Here’s the chart of DGX:
It’s a little less extended than XLV, and might have room to keep running. Plus the trade is relatively easy to manage with a stop below the recent breakout.
The next idea that caught my eye was Lear Corp. Shares of LEA have gone sideways year to date. But then something changed this week.
As you can see, LEA has exploded decisively. And while earnings are due out at the end of the month, in my experience these big moves can continue to trend until then.
While I like to buy new highs, I know that can be uncomfortable. So changing gears a little bit, keep an eye on CBRL this week.
It could be getting close to breaking out:
If the market strength continues next week, shares of Cracker Barrel could crack into blue sky territory. Keep an eye out!
The next breakout on my list is SHW. Shares of Sherwin Williams have come out of consolidation and closed near the highs.
See for yourself:
When buying breakouts like this, I’m always careful to manage risk with position-size and a detailed plan of when to sell (and how to lock in profits). But SHW is not showing any signs of slowing down.
Another stock that is back at new highs is DORM. I’ve traded this stock in the past and am happy to own shares again.
DORM is one of the less-extended stocks in the market, and there’s certainly a chance it could continue stepping higher in the weeks to come.
Now… changing gears…
I want to review some of my more recent trend following trading ideas, as many of them still have strong momentum.
The best example is probably Toro Corp. Now admittedly, I’ve talked about TTC a lot over the last 18 months or so. But why not?
As you can see, this is the stock that keeps on giving! And by the way, that doesn’t even include dividends. It just goes to show…
“Stocks can go up for MUCH longer than seems rational!”
The best example of this is probably Shopify. I first wrote about SHOP (SHOP.TO) in October 2016 (here), when I bought shares around $48. Since then, the stock has gone on an absolute tear…
It’s been hard to believe this run – and of course it’s not exactly typical. But it is representative of how trend following breakout stocks works. Because…
Without a clear set of rules to guide me, I’m doubtful I would have been able to endure this volatility. Yet on the other hand…
“With a sound strategy, it IS possible to catch BIG winners!”
So another older idea I want to share with you is AOS. I picked up shares a few weeks ago (here). And after a little pullback, it’s starting to get going again.
I think this kind of breakout isn’t too extended and thus could be a good secondary entry. After all, I’m always happy to see old stock picks showing up on my screens again.
On that note…
SBUX is also still looking good, at least in my opinion.
I wrote about shares of this ubiquitous coffee maker two weeks ago. And since then, the stock hasn’t looked back:
I want to point this out, because sometimes, the best winners never give you a chance to “buy the dip.” The get going and never look back.
Anything could happen with SBUX. And maybe it will reverse lower in the weeks to come. But there’s also the chance that it doesn’t.
By now, I think you’re getting an idea of the kind of stocks I’m buying in this market.
So here are the rest of my open positions in a FinViz watchlist. I also have some smaller holdings of Canadian that aren’t shown there (where possible I’ve subbed in the US tickers – RY, SHOP, WCN, BAM so you can see them there too).
I hope this helps give you more context on how I’m seeing the current market, and where I’m allocating capital with my trading practice.
While I’ve obviously shown you some of my favourite picks for the week ahead, I can also teach you how to fish for your own trading ideas. Just keep reading.
Learn How to Scan For Breakout Stock Picks:
If you want to learn more about how I find these kind of stock picks, I encourage you to check out my Breakout Stock Blueprint. What’s that, you ask?
Well… it’s an 80-page PDF… packed with everything I know about finding, buying and trading breakout stock picks.
This blueprint shares the EXACT step-by-step process I use to find and trade stock picks each week (just like the ones above). So…
If you want to see how to find high-potential-momentum stock picks, learn how to let your winners run and be confident about locking in profits, then this blueprint is for you.
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