With recent weakness in the market I have been looking for stocks that have held their upper ranges and showing strength. One idea that fits the bill is Citrix Systems, Inc. (CTXS). Looking to the charts we can see that CTXS had a strong move up to new 52 week highs and has now based at highs for a week. To me this signals a great deal of strength and if the market can catch a bid CTXS should be the first to make new 52-week highs, which would be my first target. In addition, CTXS is in the business software/Cloud space which is a sector that has had a deal of relative strength in the recent market retracement (ex. VMWare, Inc. (VMW) and Red Hat, Inc. (RHT)).
Using the same concept of looking for relative strength in a weak tape another favorite idea is Humana Inc. (HUM). Looking to the charts we can see a breakout move to 52-week highs and then a multi-day consolidation at the top of the range. I believe if the market can find support and then catch a bid HUM would be the first to break out of its consolidation. The measured move of the consolidation is $2 which would take HUM to my target of $73.
*DISCLOSURE: No relevant position. Plans to initiate long positions in HUM and CTXS.
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