Two of July's top-performing stocks could stretch a rally into August

A handful of stocks kicked off August on Monday with hefty July gains in the bag.

L Brands, AMD, PulteGroup, Whirlpool, Hanesbrands and Qualcomm were among the top performers last month, sporting double-digits percentage gains compared with a 6% increase for the S&P 500.

Nancy Tengler, chief investment officer at Laffer Tengler Investments, said chipmaker Qualcomm has the best chances in the group to continue its rally.

"This is a semi that has not kept up in the multiyear rally we just experienced. They had a great quarter: They beat, they raised guidance, they've got Huawei contracts, they've got a 5G handsets. But more important to us, valuation is still attractive," Tengler told CNBC's "Trading Nation" on Friday.

Qualcomm has added 67% in the past five years, while the SMH semiconductor ETF has rallied 220%.

Tengler is looking to relative dividend yield and its relative price to sales ratio as proof of potential for Qualcomm. The stock has a 2.5% dividend yield, while the SMH ETF yields 1.3%.

"We think the dividend is safe, we think they can grow the dividend," said Tengler. "It's cheaper than in many of the others in our work. So we added to it last month, and we're going to continue to hold it."

Craig Johnson, chief market technician at Piper Sandler, prefers a different stock in the group.

"We like Whirlpool. This is a stock that has reversed a downtrend going back to the 2017 highs, you've broken above your 2019 highs. It still looks like to us you've got about 16% to maybe about 24% upside up to the next kind of resistance levels around $188 and $200 on the chart," he said during the same "Trading Nation" segment.

Whirlpool is up 26% in the past month and 45% in three months. Shares hit a 52-week high last week.

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Disclosure: Laffer Tengler Investments holds Qualcomm. 

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