This little-known stock is one of the few making new highs. The charts signal it can keep going

Published Wed, Apr 17 20241:00 PM EDT

On Tuesday, 267 S & P 500 stocks made new 20-day lows. Only one S & P 500 component made a new 20-day high. The same stock was the only one within the index to make a new 50-day, 52-week and all-time high, as well: Any guesses? It was Veralto (VLTO) . Never heard of it? Well, you may have heard of its former parent company that it spun off from last fall: Danaher (DHR) . While we won't spend too much time talking about the company itself, investors should know that it's been a legitimate business in and of itself for a while. According to the company's website, Veralto is organized into two segments: water quality and product quality and innovation. VLTO is composed of 13 operating companies and had annual sales that were approximately $5 billion in 2024. VLTO got our attention from its distinct outperformance on Tuesday. And its constructive chart is why we're talking about it today. As is clear, the stock has broken out of one bullish pattern (blue) and is trying to trigger another one (green). In fact, together, these formations comprise nearly the entirety of the stock's history as a publicly traded company up to this point. Should the stock hold above the noted breakout zones, the upside targets would be $103 (blue) and $94 (green), respectively. VLTO reports earnings on April 23, which would be its third earnings release as a public company. We need to be ready for increased volatility no matter the result. Thus, post-earnings, the most significant aspect from a technical perspective would be seeing the general structures of the above bullish chart patterns stay viable. Here's how it fared after the last two reports. In October 2023, it fell 1.1% for the day, but rallied over 6% intra-day. In February of this year, it gapped higher and gained 4.5%. More importantly, the stock rallied over the ensuing weeks both times. Indeed, the sample size is understandably small, but it's something we should be aware of in front of next week's numbers. Lastly, VLTO's former parent company, DHR, has underperformed both the S & P 500 and the industrials sector since it topped in 2021. It remains 40% below that peak. VLTO has outperformed DHR since it began trading last late September. It's up nearly 13% over that time vs. DHR's loss of nearly 3%. With VLTO off to a great start, it's separated itself from DHR now both from a company and stock-performance point of view. Investors are hoping this leads to a long-term uptrend in the years to come. Continuing to leverage bullish patterns would be a necessary part of that story. -Frank Cappelleri Founder: https://cappthesis.com DISCLOSURES: (None) THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.