Major stock indexes are nearing record highs, with the S&P 500 posting its strongest second-quarter gains in more than two years. Despite the favorable backdrop, only four stocks made it into Investor’s Business Daily’s Sector Leaders screen Friday.
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It’s true, we’re talking about the most stringent IBD screening. However, a bull market normally has a larger number of IBD Sector Leaders. Let’s break down the four stocks, starting with the largest, Nvidia (NVDA).
Nvidia shares fell from their June 20 highs and went into a terrifying three-day selloff of 16%. The stock has held steady for now. Investors who bought at 92.22 during the May 15 breakout may want to consider locking in at least some profits. Nvidia shares are up about 34% since that date. Investors who bought at a lower level have even more reason to lock in at least some profits.
Before the sudden pullback, Nvidia stock rose to briefly become the most valuable company in the world. Analysts are now debating how much more upside the stock has.
Of the four IBD sector leaders, PDD holdings (PDD) has the most bearish chart. A breakout from a 142.32 buy point is fading, with shares almost 7% below the entry. The stock is down more than 6% below its 10-week moving average, which could be considered a sell signal.
PDD is the parent company of the Temu discount app for online shopping. While Temu poses a challenge to Amazon.nl (AMZN) is tackling the threat with its own discount service.
Not Just Nvidia Stocks: Wingstop, Novo Nordisk Make List
With a market cap of $12.5 billion, Wing stop (WING) is the smallest of the four IBD Sector Leaders. It’s not surprising to see a restaurant on the list, since the industry group is in the top 30 of 197 groups. But Wingstop isn’t even the No. 1 stock in the group.
Still, the 65% gain so far this year has tripled the industry group’s profits. And the chicken-wings chain nearly passes its entire IBD checklist in the IBD Stock Checkup.
Finally, Novo Nordisk (NVO) has risen more than 140% since breaking out of a double-bottom base in November 2022. After piling up consecutive bases during that run, the stock is in a risky spot. Shares are above 144.50 of a tight three-week pattern, so the run may not be over yet.
The pharmaceutical company still has a long way to go with diabetes and weight loss drugs that have great potential.
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