As we approach the end of the year, many investors are eager to position their portfolios for a potential year-end rally. Given the strong performance we’ve seen so far and the upward trend in the market, I believe it’s wise to lean towards bullish strategies for the remainder of the year.
Historical data suggests that August and September tend to be weak months for stock performance, but the final three months often make up for it with the strongest period of the year. This means that September could set the stage for a strong finish to the year.
Image Source: Zacks Investment Research
If the market continues to move higher into year end, it’s important for investors to focus on stocks with top Zacks Ranks and strong price momentum. Three such stocks to consider are SherwinWilliams (SHW), MercadoLibre (MELI), and Lam Research (LRCX).
Image Source: TradingView
SherwinWilliams: A Leading Player in the Paint and Coatings Industry
SherwinWilliams is a global leader in the paint and coatings industry, catering to residential, commercial, industrial, and automotive sectors. With a long history of sales and earnings growth, the company currently holds a top Zacks Rank #1 (Strong Buy) rating. Analysts have consistently upgraded earnings estimates across various timeframes, with current quarter estimates up 10% in the last two months and FY23 estimates up 12.4%. The stock’s technical chart pattern also looks promising, with a breakout from a bull flag formation. As long as the stock holds above the $270 level, it’s likely to continue its upward trend.
Image Source: TradingView
MercadoLibre: The Leading E-Commerce Company in Latin America
MercadoLibre, often referred to as the “Amazon of Latin America,” is a prominent e-commerce and online marketplace company serving the region. In addition to offering a wide range of products across various categories, the company provides digital payment solutions, financial services, and advertising capabilities. With impressive growth forecasts for both earnings and sales, MercadoLibre holds a top Zacks Rank #1 (Strong Buy) rating. Earnings estimates for the current quarter have been increased by 26% in the last two months, while FY23 estimates have been boosted by 21%. The stock recently broke out above a major resistance level and made 21-month highs, signaling strong momentum for a potential year-end performance.
Image Source: TradingView
Lam Research: A Key Player in Semiconductor Manufacturing
Lam Research Corporation is a global supplier of semiconductor manufacturing equipment and services, specializing in machines used in the fabrication of semiconductor chips. The company’s technology is crucial in the production of advanced semiconductor devices used in a wide range of electronic products. Lam Research has also benefited from the surge in Artificial Intelligence usage, which has driven the demand for data centers and semiconductors. With a top Zacks Rank #1 (Strong Buy) rating, Lam Research has seen strong earnings estimate revisions, particularly for the current quarter and FY23. The stock has been consistently moving higher throughout the year, forming consolidations and recently breaking out from a descending bull flag pattern. As long as the stock remains above the $660 level, it’s poised for potential new all-time highs.
Image Source: TradingView
Conclusion
As we approach the end of the year, it’s important to position your portfolio strategically to benefit from a potential year-end rally. Consider including stocks with top Zacks Ranks and strong price momentum, such as SherwinWilliams, MercadoLibre, and Lam Research. These companies have solid long-term performances and compelling near-term setups that make them attractive choices for investors. Good luck with your trading and enjoy the upcoming holiday weekend!
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Disclaimer: The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
