In this scan, we look to identify the strongest growth stocks as they climb the market-cap ladder from small- to mid- to large- and, ultimately, to mega cap status (over $200B).
Once they graduate from small-cap to mid-cap status (over $2B), they come on our radar. Likewise, when they surpass the roughly $30B mark, they roll off our list.
But the scan doesn't just end there.
We only want to look at the strongest growth industries in the market, as that is typically where these potential 50-baggers come from.
Some of the best performers in recent decades – stocks like Priceline, Amazon, Netflix, Salesforce, and myriad others – would have been on this list at some point during their journey to becoming the market behemoths they are today.
When you look at the stocks in our table, you'll notice we're only focused on Technology and Growth industry groups such as Software, Semiconductors, Online Retail, Solar, etc.
Then, like any good technician, we filter the list down to those closest to new highs.
This allows the cream of these strong groups to rise to the top and helps streamline our mission to identify technical breakouts in the top-performing stocks.
Here is this week's list:
*Click to enlarge view
Now let's dive in and discuss some of our favorite long setups!
Our first setup today is a $15B company that provides various financial services. Here is SoFi Technologies $SOFI:
SoFi Technologies has broken out higher from a bearish-to-bullish reversal pattern. If this breakout sticks, the bias will be higher, and we want to be long against the 13.50 level.
On a relative basis, the SOFI is looking ready to emerge from a similar reversal pattern versus the overall market. If this breakout holds on absolute terms, we expect the stock to continue outperforming its peers in the foreseeable future.
We want to own SOFI if it’s above 13.50, with a target of 19 over the next 2-4 months and a secondary objective of 28 over longer timeframes.
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