Volatility has eased in recent weeks, but it’s still up in the air (at least, for now). Markets simply do not become quiet right away, it takes time for trend changes to take place.
Best case, today’s market is transitioning from very volatile to “simply” volatile before becoming bullish. Worst case, the market took a breather lately, and is ready to continue its wild gyrations in the coming weeks and month. We simply do not know at this point, we have to let market do its work.
One thing is clear: we are not in a trending market right now. In sideways markets, stock picking is crucial. In this article, we show 4 great charts from long term momentum stocks which are recommended to hold in one’s portfolio during a sideways market.
LONG TERM MOMENT STOCK: FISERV
Fiserv has probably the most beautiful chart setup (on the planet). A long term momentum chart pattern can not be any more outspoken than this one. As the chart shows, the last time FISV dipped below its long term trend (represented by the 90 week moving average) was in September of 2011. FISV is a $23B company in the payment industry, processing millions of transactions each and every day for large corporations.
LONG TERM MOMENT STOCK: BRISTOL MYERS
Giant health company Bristol Myers, with a market cap of $110B, is clearly an outperformer in its segment. Although the health sector has suffered from a significant correction over the course of the last 9 months, Bristol has been holding up extremely well. 2015 was a better year than 2014, and that is reflected in its chart setup. Note how the stock has not dipped below its long term trend (except for August 24th 2015).
LONG TERM MOMENT STOCK: MICROSOFT
Many would call Microsoft a company without appeal, but it has done great financially. With an incredible product roadmap, and global product launches in software and hardware, the company has renewed itself in recent years. Microsoft’s chart pattern reflects business strength and leadership. This is the type of company that keeps your portfolio up during volatile times.
LONG TERM MOMENT STOCK: GOOGLE
Google’s business model is based on performance based advertising in its search engine. You do no need to have a PhD to understand that this is a very lucrative business model. With companies all over the world competing against each other to gain better visibility in Google, paying increasingly more for top positions, Google keeps on expanding its search business, which is the foundation for incubating new ideas and startups. Uncoincidentally, Google became the largest (tech) company on the planet lately.
Long term momentum stocks are very helpful in every market environment but they are especially valuable in volatile times. As the charts in this article show, those stocks retain value during times when almost every stock has lost between 20 and 80 percent.
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