7 stocks to keep on your radar

Even as the market signals a possible correction after recent gains there are some companies with upside technical potential.

By MoneyShow.com Apr 11, 2013 3:31PM

Stocks circled in newspaper copyright Digital Vision, Getty ImagesBy the staff at Briefing.com


The major indices have seen some distribution days since April began, especially since Friday's employment data. However, many companies were sporting lofty run-ups the last few weeks and a "healthy" correction is key to revealing the true leaders.


There have been plenty of warnings signs of this pending correction, namely the large increase in new high reversals/false breakouts (see MoneyShow) among the leaders over the last two weeks.


Those stocks collapsing on heavy volume, breaking through key support zones and uptrends, as well as 20- and 50-day moving averages (MA), warrant caution on the long-side.


Earnings season is also upon us, with a number of stocks reporting between now into early May, so be sure to check the calendar for those dates.


Chart Analysis

Splunk Inc (SPLK): The software/ITS leader jumps to the No. 1 spot on our Focus List this week. Mild pullback along its multi-month highs at $40, makes it one to keep on the radar for a breakout into higher ground.


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Cree Inc. (CREE): A leading semi/electronics name pulls back off its March highs to challenge its 2-1/2 month uptrend line, the 50-day MA and its early March breakaway bullish gap.


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Fortune Brands Home & Security (FBHS ): The home-furnishing leader slides under the rising 50-day MA this week, but should be monitored for an attempted recovery in coming days.


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Seagate Technology (STX): The computer storage company began to perk up in late March above its 50-day MA, suggesting it was ready to start moving higher again after a late-Jan/Feb correction. A mild pullback here in early April, keeps it on the radar for a breakout into higher ground over $37/$38 resistance.


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Signet Jewelers (SIG): Another company rejoining our Focus List after consolidating in a range the last two months. This week's pullback to its breakaway bullish gap and the 20-day MA is a bullish set-up if it can be maintained as a support zone.


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Resmed Inc. (RMD ): Rejoins our Focus List after falling off back in late-Jan with its bearish gap. Holding up better than majority of the market here in early April, RMD has a bullish flag pattern that could be setting up for a breakout over $46.75/$47 resistance.


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Axiall Corp (AXLL): A leading chemical stock slides under its 50-day MA this week, making it one to watch if it can turn back up and recover lost ground. Note key gap support marked by the late-Feb breakout and March lows.


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