6 New Breakout Stocks Showing Signs of Strength

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Includes: DG, DLR, ECHO, GSK, HBI, V
by: Rougemont

The stocks below are showing new signs of strength and in the coming days and weeks, could be headed higher. After doing fundamental analysis, I like to see how a stock looks based on the charts, including what the 50 and 200 day moving averages are, and what the relative strength index is, before investing. When evaluating this data, you can find stocks that appear to be starting what might be a significant new uptrend. One potential sign of this is when the 50 day moving average crosses above the 200 day moving average. This event is called a "Golden Cross Formation" and many view it as a very bullish sign. You can read more about the Golden Cross Formation here. To learn more about technical analysis in general read this. These shares have reasonable valuations, and (most have) strong balance sheets. The fact that the charts might be indicating a new uptrend is an added bonus. Here are the stocks and their charts:

Dollar General Corp., (NYSE:DG) shares are trading at $31.73. DG is a leading discount retailer, and is based in Tennessee. These shares have a 52 week range of $26.19 and $33.73. The 50 day moving average is $29.44 and the 200 day moving average is $29.32. Earnings estimates for DG are about $2.26 per share in 2011 and $2.59 for 2012. The book value is $11.87. The chart below shows these shares are trading well above the 50 and 200 day moving averages and it shows a new Golden Cross Formation. This stock is reasonably priced when compared to other retailers, so I would not be surprised if this makes a run for new highs soon.

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Digital Realty Trust, Inc., (NYSE:DLR) shares are trading at $56.78. DLR is a real estate investment trust, focused on industrial properties, and is based in California. These shares have a 52 week range of $47.42 and $64.17. The 50 day moving average is $56.18 and the 200 day moving average is $56.02. Earnings estimates for DLR are at $3.90 per share in 2011, and $4.36 for 2012. The book value is $16.02. DLR pays a dividend of $2.72 per share, which is equivalent to a 4.8% yield. The chart below shows these shares are trading just above the 50 and 200 day moving averages and the chart shows a very new Golden Cross Formation.

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Echo Global Logistics, Inc., (NASDAQ:ECHO) shares are trading at $13.49. ECHO is based in Chicago, Illinois and provides transportation services. These shares have a 52 week range of $9.85 and $16.09. The 50 day moving average is $12.65 and the 200 day moving average is $12.41. Earnings estimates for ECHO are about 56 cents per share in 2011, and 80 cents for 2012. The book value is $4.76. The chart below shows these shares are trading well above the 50 and 200 day moving averages and the chart shows a new Golden Cross Formation. This stock is looking overbought right now with a relative strength index of about 67, so I would wait for major pullbacks before considering these shares.

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HanesBrands, Inc. (NYSE:HBI) shares are trading at $27.86. HBI is based in North Carolina and manufactures and markets clothing. These shares have a 52 week range of $22.24 and $31.45. The 50 day moving average is $25.88 and the 200 day moving average is $25.62. Earnings estimates for HBI are about $2.67 per share in 2011 and $2.99 for 2012. The book value is $5.85. The chart below shows these shares are trading well above the 50 and 200 day moving averages and the chart shows a new Golden Cross Formation. This stock is looking slightly overbought right now with a relative strength index of about 66, so I would wait for pullbacks before buying.

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Human Genome Sciences, Inc., (HGSI) shares are trading at $29.44. HGSI is a biopharmaceutical company and is based in Maryland. These shares have a 52 week range of $20.56 and $33.50. The 50 day moving average is $26.54 and the 200 day moving average is $26.27. Earnings estimates for HGSI are for a loss of $1.54 per share in 2011, and a loss of 64 cents for 2012. The book value is $3.10. The chart below shows these shares are trading well above the 50 and 200 day moving averages and the chart shows a new Golden Cross Formation. Analyst estimates for revenues are seen at about $164 million in 2011 and are expected to surge to about $477 million in 2012. That type of growth is hard to find, so it's easy to see continued investor interest in these shares.

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Visa, Inc., (NYSE:V) shares are trading at $77.50. Visa is a leading provider of electronic payment services and is based in California. These shares have a 52 week range of $64.90 and $97.19. The 50 day moving average is $73.89 and the 200 day moving average is $73.46. Earnings estimates for V are about $4.86 per share in 2011, and $5.63 for 2012. The book value is $35.82. V pays a dividend of 60 cents per share which is equivalent to a .8% yield. The chart below shows these shares are trading well above the 50 and 200 day moving averages and the chart shows a new Golden Cross Formation. This stock is reasonably priced, so I would not be surprised if this heads higher. However, I would wait for pullbacks.

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The data is sourced from Yahoo Finance and Stockcharts.com. The information and data is believed to be accurate, but no guarantees or representations are made. Rougemont is not a registered investment advisor and does not provide specific investment advice. This information is solely educational in nature and not intended to serve as the basis for any investment decision.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.