The first quarter of 2012 is now behind us, and quite a quarter it was. In fact, the S&P 500 had its biggest first-quarter advance in 14 years. Stronger employment and consumer confidence were no doubt a big part of the stock market's success. But will it continue through 2012?
The S&P 500 finished the quarter up 12%, while the Nasdaq surged 19% over the quarter (Nasdaq's biggest increase since 1991). Measures of consumer confidence are near one-year highs, according to Bloomberg. Jobless claims are also near four-year lows.
Analysts, as usual, have different interpretations of the performance going forward. "The best of 2012 is probably behind us," Alan Brown, chief investment officer at Schroders told Bloomberg. "We've had a very substantial rally. I'm not sure where the fresh round of good news comes from that we haven't already discounted in today's prices. I'm rather more cautious at the present time."
On the other hand, David Kelly, chief market strategist at JPMorgan Funds disagrees. "There's no reason to avoid equities just because they've gone up a lot ... People are less fearful of a global financial meltdown emanating from Europe. If you look at valuations and the potential for economic growth, those things tell me the market should have room to move higher over the next few years."
Business section: Investing ideas
Do you think the economy (and the stock market) have nowhere to go but up? Or are you cautious knowing the market hardly ever moves in just one direction?
For a closer look at names that may be poised to outperform, we ran a screen on the best performing names in the S&P 500, rallying 20% above their 200-day moving averages and above their 20-day and 50-day moving averages as well.
We then screened for those that short-sellers expect to continue outperforming, with significantly decreasing shares shorted month-over-month.
Do you think these names are poised to continue moving higher?
Use this list as a starting point for your own analysis. (Click here to access free, interactive tools to analyze these ideas.)
1. Akamai Technologies
2. Crown Castle International
3. Capital One Financial
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Alexander Crawford does not own any of the shares mentioned above. Short data sourced from Yahoo! Finance.