KEY
TAKEAWAYS
- Technical breakouts in these three shares provide clear entry factors with outlined dangers.
- One is a market chief, one other is a tech large making a comeback, and the third is a beaten-down inventory that could be able to rally.
As we head into the second half of 2025, listed here are three shares that current sturdy technical setups with favorable threat/reward profiles. One is the biggest market cap inventory we’re conversant in, which bodes properly for the market typically. The second is an outdated tech large that is making a comeback. The third is a beaten-down S&P 500 identify that could be able to rally.
Let’s dive into these three shares.
NVIDIA (NVDA) is Main the Market
Nvidia (NVDA) shares have lastly damaged out and closed above $150, a stage we have been carefully watching. With worth motion above that resistance threshold, NVDA’s inventory worth has room to run.
DeepSeek and tariff considerations appear to be within the rearview mirror. The basic positives are continued earnings progress, continued massive tech cap-ex spend, and, extra not too long ago, Jensen Huang’s unveiling of a cute robotic he feels might be the subsequent massive factor.
Technically, this transfer has legs, and we’ve got the patterns and historical past to indicate for it. The danger/reward set-up is now fairly favorable. Let’s break it down.
Over the past 5 years, there have been intervals of consolidation (inexperienced containers) after which vital breakouts to the upside. In all instances, shares grew to become overbought in keeping with the relative energy index (RSI). However overbought does not imply NVDA’s inventory worth will reverse. Throughout uptrends, overbought situations can final for fairly a while, as they did after the prior two vital breakouts.
With the official breakout above $150 and RSI once more studying over 70, historical past suggests an prolonged rally is within the playing cards. A acquire of 25–30% from present ranges and a run to $200 is probably going.
The draw back threat is to the $150 stage, from which shares simply broke out. If this transfer is only a head faux, then use that stage as a cease to restrict your losses. This threat/reward set-up is why we consider that is one to personal for the again half of 2025.
Cisco Methods (CSCO) Finds New Life
Outdated-timers like me might keep in mind what a excessive flyer Cisco Methods (CSCO) as soon as was. It has been a member of the Dow Jones Industrial Common ($INDU) since June 2009, and shares have struggled to maintain any upward momentum till currently.
Essentially, the corporate continued to develop via acquisition. Now, these offers are beginning to assist their backside line, particularly the $28 billion acquisition of Splunk that closed in 2024.
Technically — and that is what we care about on the StockCharts platform — we are able to have some enjoyable.
Under is a 30-year chart going again to the dot-com increase. Cisco was certainly one of Wall Road’s darlings and climbed astronomically earlier than falling from the skies. It has struggled to revisit these ranges, however that would change quickly.
Switching to a smaller time-frame — a three-year weekly chart (see under) — we’re seeing nice set-ups as we head into the again half of 2025.
CSCO’s inventory worth consolidated between $43 and $55 for 15 months and broke out in late 2024. Shares rallied after which pulled again to outdated resistance (now help) at $55 and commenced their climb again.
Now shares are breaking out once more. An upside goal of $82, the all-time excessive set again throughout the dot-com period, is inside attain and may get there by year-end. The danger/reward appears favorable and, given the run in tech and cyber shares which CSCO represents, the momentum is there to achieve these highs.
Generac’s Energy Play
Welcome to hurricane season! It lasts from June 1st to November 30. Generac (GNRC), a pacesetter in house backup energy, tends to carry out properly throughout climate extremes. It is not all the time the first catalyst for rallies over the long run within the inventory, however it might spur short-term rallies.
Final week, as a lot of the nation was in the course of a warmth wave, GNRC had one of the best week of beneficial properties since November 2024, rallying practically 12%. The pattern change appears to be underway. Shares are decrease by -8.1% year-to-date, and there is room to run.
Nevertheless, the charts are exhibiting indicators of life. Let’s preserve this one so simple as doable.
🟢 The inventory broke its longer-term downtrend (pink line)
🟢 Shares have made a constant set of upper lows (inexperienced uptrend)
🟢 Shares recaptured their 50-day shifting common
🟢 Shares consolidated in an ascending triangle and broke out
🔴 Shares examined and didn’t recapture their 200-day shifting common
Progress is being made. The pattern has modified, there’s one thing to reverse, and seasonal elements and decreased tariff considerations are a real tailwind.
Shares might simply pull again — a flag, if you’ll — to the $135 space, however needs to be an amazing entry level from a threat/reward perspective. General, shares are poised to proceed reversing that longer-term downtrend, and might be a great addition to the portfolio for the tip of 2025.
The Backside Line
Every of those shares provides a viable funding technique with favorable risk-to-reward ratios. If you are going to enter a place, use clearly-defined cease ranges to handle your dangers.
Jay Woods is the Chief International Strategist for Freedom Capital Markets. Previous to becoming a member of Freedom, he was the Chief Market Strategist at DriveWealth Institutional. He additionally served as an Govt Flooring Governor on the NYSE, the best elected place on the Change held by solely six NYSE members. Jay spent over 25 years as a Designated Market Maker on the NYSE flooring.
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