Explosive Potential
During the past few weeks, many momentum/growth stocks have had a tough go of it, either selling off sharply or just barely holding on to major support. However, a few stocks have bucked the trend and are setting up for a big run if/when conditions improve.
One of the top stocks from our watchlist is Solaredge Technologies (NASDAQ:SEDG), which has a ton of potential and could soon explode higher with some help from the market.
The weekly chart of SEDG below shows the recent breakout to new all-time highs on heavy volume. This was followed by a healthy 20% correction off the highs that found support at the rising 10-week moving average.
Per Investors Business Daily’s ratings, SEDG carries a relative strength rating of 99, which is tops and an 85 earnings-per-share rating. The solar industry is currently ranked 2 of 197 groups and SEDG is the clear leader of the group.
In mid-September, SEDG undercut its 50-day moving average and the prior low from the gap-up day, which led to a strong reversal to range highs.
Recent breakout attempts have failed to follow through, but that isn’t really a knock on SEDG as the market just isn’t ready to support big breakouts yet. If/when conditions start to improve, look for SEDG to be one of the first breakouts to new highs.
