After the wildest 11 months in the equity markets in years, we are finally in the stretch run toward 2021. We could see some added volatility, and the weight of a pricey and overbought stock market finally may apply some serious pressure. While stocks are still the best investment idea long term, given the historically continued low interest rates, caution is definitely needed now.

One solid way to increase the chances for investment success with stocks is to combine solid fundamental research with outstanding technical patterns. While not offering guaranteed success, it certainly improves the chances for individual growth stock investors.

In a new research report, the BofA technical team focuses on eight companies that have very attractive stock chart patterns. We screened the stocks looking for those that are also Buy rated, are well known and liquid and offer solid upside. We found four that should whet the appetite of any growth stock investor. It is important to remember, however, that no single analyst report should be used as a sole basis for any buying or selling decision.

Analog Devices

This stock could very well continue to benefit from the increase in information technology and 5G spending. Analog Devices Inc. (NASDAQ: ADI) is a leader in the design, manufacture and marketing of analog, mixed-signal and digital signal-processing integrated circuits for use in industrial, automotive, consumer and communication markets worldwide.

The company offers signal-processing products that convert, condition and process real-world phenomena, such as temperature, pressure, sound, light, speed and motion, into electrical signals.

Analog Devices has among the best end-market exposure, with high communications and aerospace/defense market exposure, in addition to offering investors a powerful 5G content growth story. Plus, acquisitions over the past few years like Linear Technology and Hittite Microwave should provide revenue and additional cost synergies that are still coming.

The technical analysts noted this when reviewing the chart:

The stock has broken out from a July 2019 to November 2020 bullish head and shoulders pattern. This breakout remains firmly in place provided that support at 131.50 (higher low) down to 127-124 (breakout point) contains any interim dips. The bullish head and shoulders pattern favors further upside to 158 (measured move) and 175 (pattern count). ADI has the potential to reassert leadership within a longer-term bullish trend relative to the S&P 500.

Analog Devices stock investors receive a 1.77% dividend. The BofA Securities price target for the shares is $160, and the Wall Street consensus target is $153.69. The shares closed Thursday’s trading at $139.75 apiece.

Las Vegas Sands

With casinos starting to open back up, this is a great long-term play for growth investors. Las Vegas Sands Corp. (NYSE: LVS) develops, owns and operates integrated resorts in Asia and the United States.

The company owns and operates the Venetian Macao Resort Hotel, the Sands Cotai Central, the Parisian Macao, the Plaza Macao and Four Seasons Hotel Macao, Cotai Strip, and the Sands Macao in Macao, the People’s Republic of China, as well as Marina Bay Sands in Singapore.

It also owns and operates the Venetian Resort Hotel Casino on the Las Vegas Strip and the Sands Expo and Convention Center in Las Vegas. Its integrated resorts feature accommodations, gaming, entertainment and retail malls, convention and exhibition facilities, celebrity chef restaurants and other amenities.

The company has eliminated its dividend and said that it has ended its plans to open an integrated resort casino in Japan. The technical team loves the setup and said this:

The 2020 base or bottom pattern breakout suggests further upside to 63.44-65.56 (late February downside gap) and into the low to mid 70s with the late January downside gap at 71.34- 73.51. The bull flag pattern counts to 74 and the 2020 bottom projects to 76.

BofA Securities has a $61 price target, while the posted consensus target is $58.94. Las Vegas Sands stock was last seen trading at $58.66 a share.

Micron Technology Inc. (NASDAQ: MU) is a global leader in advanced semiconductor systems. Its broad portfolio of high-performance memory technologies includes DRAM, NAND and NOR flash, which is the basis for solid-state drives, modules, multi-chip packages and other system solutions. The company’s memory chip solutions enable the world’s most innovative computing, consumer, enterprise storage, networking, mobile, embedded and automotive applications.

With memory demand drivers remaining somewhat underappreciated, and with solid demand from end-markets such as data center, AI, deep learning, so-called Big Data, mobile and autonomous driving, Micron continues to execute well on its manufacturing roadmap despite recent issues.

The technical team likes the potential from current trading levels:

Holding support at 64.66-63.42 (prior highs from 2018) down to 60-58 (triangle breakout point and November upside gap) would keep this breakout firmly in place with upside potential to pattern counts at 78 and 93. MU is breaking out from a 2-year base or bottom relative to the S&P 500, which provides bullish confirmation.

The strong $80 BofA Securities price target compares with the $72.02 consensus target. Micron Technology stock closed at $69.90 on Thursday.

Morgan Stanley

This is one of Wall Street’s white-glove firms, and it may be among the best buys in the banking and investment arena. Morgan Stanley (NYSE: MS) is a global investment bank with leading positions in investment banking (M&A and equity underwriting), equity trading and wealth management, which contributes nearly 50% of firmwide revenues. The firm also has an asset management business, which adds to the lower-risk business profile the firm has pursued since the financial crisis.

Earlier this year, the Wall Street investment bank agreed on a $13 billion purchase of discount brokerage E-Trade. With 5.2 million customers, it was once a revolutionary platform that “helped usher in a dramatic shift among financial services firms” and fueled the rise of indexes and exchange-traded funds, making investing vastly easier for do-it-yourself investors. The deal was approved by shareholders in the summer and closed in October.

The technical analysts love the upside potential:

Holding above support at 57-56 (breakout point) down to 54.89-52.77 (big November upside gap) keeps the technicals bullish with upside potential to pattern counts at 78, 83 and 87. This means that MS can surpass its 2007 pre-Financial crisis peak at 75.50. A bullish rotation for MS relative to the S&P 500 provides positive confirmation for this base breakout

Investors receive a 2.19% dividend. BofA Securities has set a $70 price target. The consensus price objective is lower at $62.76, and Morgan Stanley stock closed most recently at $64.06 per share.

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These four top companies have the one-two punch of great fundamentals, very solid technical chart patterns and stock action, plus a Buy rating from the BofA Securities team. Given the big move up the market has made, and with end-of-year portfolio shifts coming, it may make sense to buy partial positions now and see how the market responds for the balance of the month.

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