Technical Watchlist: Minerals Technologies, America's Car-Mart, USANA Health Sciences

Here are some small and large-cap stocks with interesting technical setups in play. It’s well worth keeping them on a watchlist in case shares breakout. Check out last week’s Technical Watchlist here.

Minerals Technologies (NYSE:MTX)

Despite selling into their Q3 earnings at the end of October, Minerals Technologies’ (NYSE:MTX) shares have been moving steadily upwards in the 5 weeks since. A solid EPS beat on analyst expectations set the tone as the New York-based basic materials stock has been busy posting higher and higher lows.

This kind of trading action is often regarded as extremely bullish as every dip is bought and momentum to the upside builds.

If the stock happens to be recovering from a selloff, then you’ll often set a technical pennant in the making which is exactly what’s happening on MTX’s chart on both the long and short term view.

After setting all-time highs in 2017, shares found themselves down nearly 50% by this past July. It’s the downtrend from these highs that shares are starting to bounce off and a showdown is imminent and the range narrows.

Traders should look for a decisive breakout one way or the other with higher than normal volume confirming the move. The mid $60s make sense as a natural target to the upside from here while down below, a break of September’s low of $45 would spell big trouble.

America's Car-Mart (NASDAQ: CRMT)

Shares of America's Car-Mart (NASDAQ: CRMT) have been on an absolute heater since mid-November when the company reported their Q2 results. The company announced a solid beat on both EPS and revenue and in the weeks since shares have rallied 30% to hit all-time highs.

While there’s been some profit-taking in the past week, their structural momentum keeps the shares attractive even at these heights. They’re up almost 400% in the past 4 years, with impressive earnings numbers proving to be the main catalyst for all the big jumps along the way.

It will be interesting to see how things play out in the next few weeks. The stock has a history of selling off and then drifting sideways after big earnings-driven jumps and a refusal to retake fresh highs would suggest it’s staying true to form. On the flip side, if the bulls on Wall Street can win the battle and get above the $110 level then they’ll get to write their own history.

A break below the rising trend line that the stock has hugged over the past 4 weeks would likely spell short-term weakness. If that happens, investors should consider it an early Christmas present and watch for the sideways consolidation that’s occurred after the last two earnings reports. There’s real momentum with this stock and it wants to go in one direction only. The big question is when.

USANA Health Sciences (NYSE: USNA)

Everybody loves a good comeback story and that’s exactly what’s on the cards with USANA Health Sciences (NYSE: USNA). Shares of the multi-level marketing company have taken a beating since setting all-time highs in 2018 and fell as much as 60% through June of this year.

They’ve staged a decent rally since then and most importantly have broken up through that downtrend that dogged them all through the past 18 months. With a 30% rally from the last 5 months behind them coupled with higher lows and higher highs, the future looks bright and investors should consider the long opportunity as suggested by the technicals.

Even though they reported an EPS that was 22% lower year on year at their last earnings report, the numbers still beat analyst expectations, suggesting that the selling of recent months was overdone. This comes after a beat on expectations in October’s release too.

Look for a continued move north with the rising trend line providing support all the way. There’s no real resistance until around the $90 level which is a 20% move away yet. Shares have been moving out of oversold conditions, the RSI having gone well below 30 at one point in May (read our article on trading with  RSI here). A bullish MACD crossover in August confirmed the potential shares have and both these indicators remain strong going into the last 3 weeks of the year.