Potential Breakout Setups To Watch On Wednesday

The U.S. stock market has weakened throughout Tuesday’s trading session and the major indices were sitting near session lows heading into the closing bell. The price action in the SPDR S&P 500 ETF SPY has dragged the broad index below a 10-day trading range and could be a harbinger of more losses to close out the week as traders and investors have been looking for a technical move to determine near-term momentum. 

Nevertheless, the market has been holding up quite well despite plenty of headwinds and prognostications of gloomy days ahead on Wall Street. It seems just as possible that Tuesday’s price action, with SPY last trading down around 1.50%, is nothing more than a small lull in intermediate momentum, which has been to the upside. 

There are plenty of stocks that are showing bullish technicals and could be poised to break out to new 52-week highs in the coming days. Here is a look at five of the more promising set-ups for the coming trading days. 

Beazer Homes USA BZH – Homebuilder stocks have been seeing strong momentum in recent months, driven in part by investor expectations that Fed rate hikes are unlikely to continue and that the central bank may actually pivot and cut rates in the second half of the year. The stock is up almost 31% so far in 2023 and has surged better than 15% in the past month alone. Late on Tuesday, BZH was trading at $17.02. Traders will want to keep an eye on the $17.32 level in the coming days, as this would represent a new 52-week high in the name and a breakout to the upside could send BZH to the $20.00 level in the near term.

Hovanian Enterprises HOV – Like the previous name, Hovanian is a United States home builder that appears set to take out its 52-week high. The stock has run into some resistance as it approaches its previous high of $74.50, but the technical picture remains quite promising and a breakout appears imminent. HOV is up more than 9% over the last month and momentum traders should have this name on their radars for the rest of the week. 

Legend Biotech Corp LEGN – Legend shares have surged better than 46% over the last month on the back of positive drug data. The stock has taken a bit of a breather over the last couple of trading sessions, but there is a very defined level at $70.00 that traders should be watching. A push above this area on continued heavy volume would be a great indication that the momentum in LEGN is set to continue. 

Las Vegas Sands LVS – The one-year chart in LVS is very bullish, although the company’s longer-term performance leaves something to be desired. The stock is sitting near 52-week high levels after climbing nearly 27% in 2023 thus far. Volume in the name has been picking up in recent sessions and its price is trending well above all major moving averages, with no near-term trendline resistance ahead for LVS. A potential catalyst for the stock would be any positive economic data that suggests the American consumer is holding up better than anticipated amid historic inflation and rising interest rates. 

Molson Coors Beverage Co. TAP – The story here is one of near-term momentum despite an uncertain market environment. The stock has shot up almost 15% over the last month and closed Tuesday’s session at $58.71, just under a 52-week high of $60.12. TAP shares have closed higher in 10 of the last 11 trading sessions and it would appear that the stock is setting up for a powerful breakout above $60.00 in the coming days. 

Featured photo by Patrick Weissenberger on Unsplash