Last week's technical selections gained ~4% on an equal-weight basis while the S&P 500 declined roughly 0.2%, creating about four percentage points of relative outperformance in only one week. Huron Consulting led the basket with a gain of around 7%, while Vertex Pharmaceuticals, CME Group, Airbnb and Canadian Pacific Kansas City also finished the review period in positive territory. That performance reinforces an important change in the market: the index may be stalling near record territory, but stock-level alpha is still available when catalysts and technical confirmation align. This week's screen identified five opportunities across healthcare technology, digital payments, defense, infrastructure and electronic components. Their first targets offer approximately 4% to 9% upside, while extended targets reach 7% to 13%; closing stops generally limit downside to about 2% to 5%. One stock already has a confirmed MA3>MA7>MA10 structure, two are approaching important breakout levels, and one under-the-radar small cap could benefit from improving industry demand and potential short covering.
This Week's Best Setup
Solventum (SOLV)
Mid cap — approximately $16 billion
Rating: Strong Buy
Strength: Solventum is shifting from a complicated 3M spinoff into a more focused healthcare technology company. Management's plan to separate the Health Information Systems business could simplify the portfolio, make the remaining medical franchises easier to value and accelerate debt reduction.
The broader transformation is also beginning to produce better organic growth and cash generation. The opportunity is therefore not limited to a short-lived earnings reaction. Investors may gradually assign Solventum a higher valuation as execution becomes more visible and the company establishes a credible independent track record.
Its businesses in wound care, dental products, medical filtration and healthcare materials provide defensive demand without depending heavily on economic acceleration. That combination of portfolio simplification, improving execution and resilient end markets gives SOLV the strongest balance between catalyst and technical momentum this week.
Technical: SOLV has the clearest short-term structure in the group, with MA3 above MA7 and MA7 above MA10. The averages are rising rather than merely crossing, suggesting that buyers are supporting the stock across several time frames.
Resistance near $92.70 is the key decision level. A closing breakout above $92.80 would confirm continuation and could attract additional momentum demand. Investors who prefer an earlier entry can consider a controlled pullback that holds the $89.80-$90.50 area.
Short-term target: $97, approximately 6% above the latest reference price. If momentum remains constructive, the extended target is $101, or roughly 10% upside.
Stop loss: Close below $88.40, approximately 3% downside. That would break the recent support structure and weaken the bullish moving-average sequence.
Visa (V)
Mega cap — approximately $705 billion
Rating: Buy on Breakout
Strength: Visa offers a higher-quality way to participate in the next phase of digital commerce without relying on a single consumer product or technology cycle. Its network remains positioned between banks, merchants, consumers and emerging payment platforms, allowing the company to benefit as more transactions move from cash to digital channels.
The more interesting forward catalyst is Visa's expansion into agentic commerce, tokenized payments and stablecoin settlement. If AI agents increasingly initiate purchases for consumers and businesses, the payment network must verify the agent, authorize the transaction and protect both merchants and customers.
Visa is attempting to make its security and token infrastructure central to that process. Traditional card payments remain the baseline business, while programmable commerce and value-added services could become the next rerating layer.
Technical: Visa has a confirmed MA3>MA7>MA10 structure and is testing the upper boundary of a multi-week consolidation. Momentum is strong, but the stock should not be chased far above resistance.
The preferred entries are either a closing breakout above $386 or a pullback that holds the $379-$381 zone. Remaining above that area would indicate that former resistance is becoming support.
Short-term target: $400, approximately 4% upside. A sustained breakout into new-high territory could extend toward $412, or roughly 7% upside.
Stop loss: Close below $372.50, approximately 3% downside. That would return the stock to its former range and suggest that the breakout lacked follow-through.
Lockheed Martin (LMT)
Large cap — approximately $131 billion
Rating: Tactical Buy
Strength: Lockheed Martin remains one of the clearest beneficiaries of the long-term effort to rebuild U.S. and allied defense inventories. The investment thesis is moving beyond temporary geopolitical headlines. Missile defense systems, interceptors and munitions require multi-year production expansion, making demand more durable than a short-term increase in military spending.
Lockheed is also developing modular missile technologies that can be adapted across multiple missions, potentially shortening development cycles and improving manufacturing efficiency. A large backlog gives the company visibility while governments prioritize air defense, space systems and weapons-production capacity.
The company therefore combines defensive characteristics with a structural growth cycle. Its relatively low dependence on consumer spending could also make the stock more attractive if economic uncertainty increases.
Technical: LMT is attempting to reverse after an orderly pullback from resistance. The stock has begun reclaiming MA3, but MA7 and MA10 remain overhead, so this is an early reversal rather than a fully confirmed uptrend.
A close above $570 would improve the setup, while a move through $575 would provide stronger confirmation that buyers have regained control. The $555-$560 region is the support zone that must hold.
Short-term target: $590, approximately 4% upside. If the recovery clears that resistance, the next target is $607, or roughly 7% upside.
Stop loss: Close below $553, approximately 2% downside. A failure there would break the recent recovery low and increase the probability of a deeper consolidation.
CRH (CRH)
Large cap — approximately $65 billion
Rating: Buy on Confirmation
Strength: CRH provides exposure to infrastructure spending through aggregates, cement, roads, water systems and other essential building materials. Its advantage is not simply higher government expenditure. The company controls strategically located assets that are difficult to replicate, giving it pricing power across many regional markets.
The company could also benefit from infrastructure modernization, data-center construction, water-system upgrades and population growth across major U.S. regions. These are multi-year investment cycles rather than one-quarter catalysts.
The planned acquisition of Arcosa could expand CRH's position in aggregates and critical infrastructure, while continued portfolio reshaping moves capital toward businesses with stronger growth and better margins. The market remains cautious about construction cyclicality and acquisition risk, but that skepticism creates room for a rerating if execution remains steady.
Technical: The short-term formation is improving, with MA3 now above MA10 and MA7. Shares are building a base beneath the $98 area after defending support in the low-$90s.
A closing breakout above $98.20 would confirm that the recovery is moving beyond a temporary bounce. A successful retest of the $95-$96 area could also offer an entry with tighter risk.
Short-term target: $102, approximately 5% upside. If the stock clears its broader consolidation, the extended target is $106, or roughly 9% upside.
Stop loss: Close below $93.40, approximately 4% downside. That would invalidate the recent higher-low structure and return the stock to its previous downtrend.
Avnet (AVT)
Small cap — approximately $7 billion
Rating: Speculative Buy
Strength: Avnet is an under-followed way to participate in the electronics recovery. As a distributor connecting semiconductor manufacturers with industrial, automotive, aerospace and technology customers, the company benefits when customers rebuild inventories and component demand broadens beyond the largest AI companies.
The attraction is operating leverage. Distribution margins are thin, but improving volumes can produce a much larger impact on profitability and cash generation. Demand has recently strengthened across regions and customer groups, suggesting that the recovery may be becoming broader rather than remaining concentrated in a few high-performance computing products.
Management's dividend increase also signals confidence in the company's financial position. Meanwhile, elevated short interest could become an additional technical accelerator if the recovery is confirmed and bearish investors begin covering positions.
This is the smallest and highest-risk selection in the group, but it also offers the largest target range. Position sizing should therefore be smaller than for Visa or Solventum.
Technical: AVT is in an early recovery rather than a confirmed breakout. The stock has reclaimed MA3 and MA7 but is still testing MA10 and overhead supply.
A close above $91.50 would complete the short-term reversal and create a path toward the prior resistance zone. Until that happens, the setup remains vulnerable to another test of the mid-$80s.
Short-term target: $98, approximately 9% upside. Stronger momentum and short covering could extend the move toward $102, or roughly 13% upside.
Stop loss: Close below $85.40, approximately 5% downside. That would break the recent base and indicate that sellers remain in control.
Priority Ranking
SOLV — Best overall setup: Confirmed momentum, portfolio simplification and attractive risk-reward.
V — Highest-quality momentum: Strong trend with exposure to agentic and programmable commerce.
CRH — Best cyclical recovery: Infrastructure demand and an improving base below resistance.
LMT — Best defensive opportunity: Structural defense demand, although technical confirmation is still required.
AVT — Highest potential, highest risk: Small-cap recovery with up to 13% upside, suitable for reduced position sizing.
Trading Discipline
Use closing prices for every trigger and stop; intraday volatility alone should not force a decision. Start with half of the intended position before confirmation and add only after the breakout holds. If a stock opens more than 2% above its trigger, avoid chasing and wait for a retest.
AVT should be sized smaller because its volatility and downside risk are higher. SOLV and Visa have the strongest confirmed momentum, while LMT and CRH require more patience around their respective breakout levels.
The percentages above use August 26 closing prices as the reference. These ratings are designed for short-term technical opportunities, and a valid closing stop should always take priority over the fundamental story.
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The Market Is Stalling, but These 5 Quality Alpha Plays Offer Up to 13% Upside With Clear Risk Levels
Last week's technical selections gained ~4% on an equal-weight basis while the S&P 500 declined roughly 0.2%, creating about four percentage points of relative outperformance in only one week. Huron Consulting led the basket with a gain of around 7%, while Vertex Pharmaceuticals, CME Group, Airbnb and Canadian Pacific Kansas City also finished the review period in positive territory. That performance reinforces an important change in the market: the index may be stalling near record territory, but stock-level alpha is still available when catalysts and technical confirmation align. This week's screen identified five opportunities across healthcare technology, digital payments, defense, infrastructure and electronic components. Their first targets offer approximately 4% to 9% upside, while extended targets reach 7% to 13%; closing stops generally limit downside to about 2% to 5%. One stock already has a confirmed MA3>MA7>MA10 structure, two are approaching important breakout levels, and one under-the-radar small cap could benefit from improving industry demand and potential short covering.
This Week's Best Setup
Solventum (SOLV)
Mid cap — approximately $16 billion Rating: Strong Buy
Strength: Solventum is shifting from a complicated 3M spinoff into a more focused healthcare technology company. Management's plan to separate the Health Information Systems business could simplify the portfolio, make the remaining medical franchises easier to value and accelerate debt reduction.
The broader transformation is also beginning to produce better organic growth and cash generation. The opportunity is therefore not limited to a short-lived earnings reaction. Investors may gradually assign Solventum a higher valuation as execution becomes more visible and the company establishes a credible independent track record.
Its businesses in wound care, dental products, medical filtration and healthcare materials provide defensive demand without depending heavily on economic acceleration. That combination of portfolio simplification, improving execution and resilient end markets gives SOLV the strongest balance between catalyst and technical momentum this week.
Technical: SOLV has the clearest short-term structure in the group, with MA3 above MA7 and MA7 above MA10. The averages are rising rather than merely crossing, suggesting that buyers are supporting the stock across several time frames.
Resistance near $92.70 is the key decision level. A closing breakout above $92.80 would confirm continuation and could attract additional momentum demand. Investors who prefer an earlier entry can consider a controlled pullback that holds the $89.80-$90.50 area.
Short-term target: $97, approximately 6% above the latest reference price. If momentum remains constructive, the extended target is $101, or roughly 10% upside.
Stop loss: Close below $88.40, approximately 3% downside. That would break the recent support structure and weaken the bullish moving-average sequence.
Visa (V)
Mega cap — approximately $705 billion Rating: Buy on Breakout
Strength: Visa offers a higher-quality way to participate in the next phase of digital commerce without relying on a single consumer product or technology cycle. Its network remains positioned between banks, merchants, consumers and emerging payment platforms, allowing the company to benefit as more transactions move from cash to digital channels.
The more interesting forward catalyst is Visa's expansion into agentic commerce, tokenized payments and stablecoin settlement. If AI agents increasingly initiate purchases for consumers and businesses, the payment network must verify the agent, authorize the transaction and protect both merchants and customers.
Visa is attempting to make its security and token infrastructure central to that process. Traditional card payments remain the baseline business, while programmable commerce and value-added services could become the next rerating layer.
Technical: Visa has a confirmed MA3>MA7>MA10 structure and is testing the upper boundary of a multi-week consolidation. Momentum is strong, but the stock should not be chased far above resistance.
The preferred entries are either a closing breakout above $386 or a pullback that holds the $379-$381 zone. Remaining above that area would indicate that former resistance is becoming support.
Short-term target: $400, approximately 4% upside. A sustained breakout into new-high territory could extend toward $412, or roughly 7% upside.
Stop loss: Close below $372.50, approximately 3% downside. That would return the stock to its former range and suggest that the breakout lacked follow-through.
Lockheed Martin (LMT)
Large cap — approximately $131 billion Rating: Tactical Buy
Strength: Lockheed Martin remains one of the clearest beneficiaries of the long-term effort to rebuild U.S. and allied defense inventories. The investment thesis is moving beyond temporary geopolitical headlines. Missile defense systems, interceptors and munitions require multi-year production expansion, making demand more durable than a short-term increase in military spending.
Lockheed is also developing modular missile technologies that can be adapted across multiple missions, potentially shortening development cycles and improving manufacturing efficiency. A large backlog gives the company visibility while governments prioritize air defense, space systems and weapons-production capacity.
The company therefore combines defensive characteristics with a structural growth cycle. Its relatively low dependence on consumer spending could also make the stock more attractive if economic uncertainty increases.
Technical: LMT is attempting to reverse after an orderly pullback from resistance. The stock has begun reclaiming MA3, but MA7 and MA10 remain overhead, so this is an early reversal rather than a fully confirmed uptrend.
A close above $570 would improve the setup, while a move through $575 would provide stronger confirmation that buyers have regained control. The $555-$560 region is the support zone that must hold.
Short-term target: $590, approximately 4% upside. If the recovery clears that resistance, the next target is $607, or roughly 7% upside.
Stop loss: Close below $553, approximately 2% downside. A failure there would break the recent recovery low and increase the probability of a deeper consolidation.
CRH (CRH)
Large cap — approximately $65 billion Rating: Buy on Confirmation
Strength: CRH provides exposure to infrastructure spending through aggregates, cement, roads, water systems and other essential building materials. Its advantage is not simply higher government expenditure. The company controls strategically located assets that are difficult to replicate, giving it pricing power across many regional markets.
The company could also benefit from infrastructure modernization, data-center construction, water-system upgrades and population growth across major U.S. regions. These are multi-year investment cycles rather than one-quarter catalysts.
The planned acquisition of Arcosa could expand CRH's position in aggregates and critical infrastructure, while continued portfolio reshaping moves capital toward businesses with stronger growth and better margins. The market remains cautious about construction cyclicality and acquisition risk, but that skepticism creates room for a rerating if execution remains steady.
Technical: The short-term formation is improving, with MA3 now above MA10 and MA7. Shares are building a base beneath the $98 area after defending support in the low-$90s.
A closing breakout above $98.20 would confirm that the recovery is moving beyond a temporary bounce. A successful retest of the $95-$96 area could also offer an entry with tighter risk.
Short-term target: $102, approximately 5% upside. If the stock clears its broader consolidation, the extended target is $106, or roughly 9% upside.
Stop loss: Close below $93.40, approximately 4% downside. That would invalidate the recent higher-low structure and return the stock to its previous downtrend.
Avnet (AVT)
Small cap — approximately $7 billion Rating: Speculative Buy
Strength: Avnet is an under-followed way to participate in the electronics recovery. As a distributor connecting semiconductor manufacturers with industrial, automotive, aerospace and technology customers, the company benefits when customers rebuild inventories and component demand broadens beyond the largest AI companies.
The attraction is operating leverage. Distribution margins are thin, but improving volumes can produce a much larger impact on profitability and cash generation. Demand has recently strengthened across regions and customer groups, suggesting that the recovery may be becoming broader rather than remaining concentrated in a few high-performance computing products.
Management's dividend increase also signals confidence in the company's financial position. Meanwhile, elevated short interest could become an additional technical accelerator if the recovery is confirmed and bearish investors begin covering positions.
This is the smallest and highest-risk selection in the group, but it also offers the largest target range. Position sizing should therefore be smaller than for Visa or Solventum.
Technical: AVT is in an early recovery rather than a confirmed breakout. The stock has reclaimed MA3 and MA7 but is still testing MA10 and overhead supply.
A close above $91.50 would complete the short-term reversal and create a path toward the prior resistance zone. Until that happens, the setup remains vulnerable to another test of the mid-$80s.
Short-term target: $98, approximately 9% upside. Stronger momentum and short covering could extend the move toward $102, or roughly 13% upside.
Stop loss: Close below $85.40, approximately 5% downside. That would break the recent base and indicate that sellers remain in control.
Priority Ranking
SOLV — Best overall setup: Confirmed momentum, portfolio simplification and attractive risk-reward.
V — Highest-quality momentum: Strong trend with exposure to agentic and programmable commerce.
CRH — Best cyclical recovery: Infrastructure demand and an improving base below resistance.
LMT — Best defensive opportunity: Structural defense demand, although technical confirmation is still required.
AVT — Highest potential, highest risk: Small-cap recovery with up to 13% upside, suitable for reduced position sizing.
Trading Discipline
Use closing prices for every trigger and stop; intraday volatility alone should not force a decision. Start with half of the intended position before confirmation and add only after the breakout holds. If a stock opens more than 2% above its trigger, avoid chasing and wait for a retest.
AVT should be sized smaller because its volatility and downside risk are higher. SOLV and Visa have the strongest confirmed momentum, while LMT and CRH require more patience around their respective breakout levels.
The percentages above use August 26 closing prices as the reference. These ratings are designed for short-term technical opportunities, and a valid closing stop should always take priority over the fundamental story.
Read full article here »