The Dow rose to hit an all-time high on Thursday afternoon after rising to a record close on Wednesday, while the S&P 500 has been inching higher to start the month as better than expected jobless claims spurred the market higher.
But the month started off a bit choppy, with the S&P and Nasdaq ending the first trading day in May lower, with the latter seeing its worst day since March.
Even with the choppiness, there are a couple of stocks that traders say look poised to move higher this month.
Fairlead Strategies founder and managing partner Katie Stockton said this week that she sees Walmart (NYSE: WMT) moving higher.
“It’s breaking out from a short-term consolidation phase,” Stockton said, pointing to Walmart’s chart, “and with that, we’re also seeing it rise above a 200-day moving average more decisively.”
Stockton added that the 200-day moving average is also reflecting a “long-term uptrend” that climbs as Walmart’s momentum picks up.
“For months, Walmart has been somewhat under pressure in terms of intermediate-term momentum, but finally, this little relief rally that we’ve seen has generated a buy signal in one of our preferred momentum gauges,” Stockton added.
“We’re looking for not just upside follow-through in absolute terms, but also relative outperformance by Walmart versus the S&P 500,” Stockton said. “We think that it’s well positioned in part because of its more defensive properties. Growthier stocks look poised to pull back in relative terms whereas names like Walmart do appear to have some good room for outperformance.”
Cowen analyst Oliver Chen likes Walmart as well, reiterating an Outperform rating late last month citing several catalysts for the stock including its increasing global reach, successful e-commerce business, and the strength of the U.S. consumer. Chen has a $170 price target on the stock, indicating upside of over 20%.
But Walmart isn’t the only chart that looks good now.
Oppenheimer’s Ari Wald says health insurer Cigna (NYSE: CI) looks good over the intermediate-term.
“Seasonally, the health care sector has been the top-performing sector between the months of May and July going back to 1990,” Wald, the firm’s head of technical analysis, said. “So, you’re in the right ballpark here.”
“The stock is just breaking through very big resistance going back three years at the $267 mark,” Wald added. “We can see a very steady, positive slope to its 200-day moving average.
What’s more, Cigna is reversing a longer-term downtrend versus the S&P 500 and its 200-day moving average is beginning to turn higher. That’s good news for the stock.
“Add it up and we think this could finally be it for Cigna,” Wald concluded.