By Doug Busch
Inside the strong industrials space lies a hidden gem that looks ripe for some more upside. BWX Technologies is among a group of stocks that cater to the important nuclear industry. The stock is up 23% YTD, outpacing the S&P 500's 6%.
On the daily chart below, notice how the stock is digesting a powerful move off the early April lows. The stock hasn't fallen for consecutive sessions in two months, even with Tuesday's decline of 4.5%. It has now formed a " bull flag pattern," which is a healthy pause before a likely resumption of the uptrend. A close above $145 could see a " measured move" to $184. The stock is now retesting a cup base breakout trigger of $136.41. (A cup base is formed when a stock forms a U-shaped pattern near its lows.)
Looking at the longer term picture also demonstrates valid reasons why BWX could remain strong during the second half of 2025. On the weekly chart, shares broke out from a " double bottom pivot" -- when a stock can't drop below a previous low and starts to turn higher -- of $129.61, while the last three weeks have seen the stock close within $0.87 of each other. Breaks above this type of strong consolidation tend to be very robust, and the best breakouts tend to work right away and offer additional buy opportunities on the way up.
The case for BWX is fundamental as well. Heavyweights like Alphabet, Nvidia, and Meta Platforms embrace nuclear technology, and the current administration is friendly to the power source, suggesting the stock could continue its advance into year-end. Additional evidence that demand is high for the space, is the anticipated new issue in Holtec International in the coming months.
The hype of nuclear technology is starting to live up to expectations.
Write to Doug Busch at douglas.busch@barrons.com
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July 09, 2025 14:42 ET (18:42 GMT)
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