The S&P 500 has fallen over the past two weeks, but there are plenty of stocks showing strength. Giant of oil services SLB (SLB) is in a buy zone. MasterCard (MA) is also in a buying area and close to other entries. Carnival (CCL) tests support within a new base. Arista Networks (ANET) is not far from a buy point after an earnings gap. In the meantime, KB Home (KBH) constructed a rare trading pattern.
The market rally is under heavy pressure, with the Nasdaq below its 50-day moving average. The S&P 500 has held that level and many non-tech sectors are holding up. But investors should be careful.
SLB, formerly known as Schlumberger, broke above a buying point last week as oil prices rose for a seventh straight week, to their highest level since last August. The oil services giant is ranked second in the Oil & Gas-Field Services Group, which is led by Tidal water (TDW), according to the IBD Stock Checkup.
SLB was the August 9th IBD stock of the day and added to SwingTrader.
Shares broke out on Aug. 9 and are trading in a buy zone, just above the buy point of 58.70 for a cup-with-handle basis.
SLB stocks have a near-perfect 98 Composite Rating out of a best possible 99. The Composite Rating combines several technical indicators into one easy-to-read score. Stocks have an 89 EPS Rating. The stock’s relative strength line fell from January highs and has a 92 RS Rating.
Cloud networking giant Arista Networks broke forecasts for Q2 results on July 31. Arista earnings rose 46% to $1.58 per share, compared to estimates of $1.44. Revenue increased 39% to $1.46 billion, versus forecasts of $1.38 billion. Analysts expect Arista’s artificial intelligence networking offerings to drive growth by 2025.
ANET stock is a member of the IBD 50 list and ranks second in the Computer-Networking Group, according to the IBD Stock Checkup.
Shares jumped past a buy point of 178.36 on August 1 after gains. ANET share has since retreated in declining volume, closing Friday at 174.94. The moving averages are starting to catch up.
The tight action is constructive after the wild action of recent months and shows resilience amid a tech-led pullback.
Arista has a 98 Composite Rating and 98 EPS Rating. ANET shares have a 93 RS rating.
KB Home was the IBD stock of the day on Thursday. Homebuilders recovered aggressively this year as rising interest rates slowed sales of existing homes, boosting demand and prices for new homes. The Construction-Residential/Commercial industry group so far rose almost 38% higher in 2023.
KBH shares are in a bullish base that started in mid-May. Rising bases are unusual and are generally formed on stocks that are eager to move higher.
The base has a buy point of 55.37 and has held support at KBH’s 21-day exponential moving average. The stock broke below the 21-day line on Thursday, widening losses on Friday as rising government bond yields point to higher mortgage rates
KBH stock is hovering above its 50-day moving average.
Year-to-date, shares are up nearly 65% and are trading near their highest levels since 2007.
KBH shares have a 94 Composite Rating and an 83 EPS Rating. The relative strength line is shy of recent highs in August and has a 95 RS Rating.
Carnival sailed nearly 108% higher this year as cruise lines saw a huge surge in bookings as the travel industry bounced back. The IBD 50 member announced that total customer deposits reached a record $7.2 billion in Q2 earnings as of the end of June and expects to return to profitability in the second half of 2023.
CCL shares rose nearly 34% following second-quarter results on June 26. The shares have since pulled back from their July 5 high and are trading below the buy point of 19.55 for a flat base.
CCL shares fell 3.3% on Friday to the 50-day moving average and slightly below the 10-week line. A strong rebound could provide an early start, with last week’s high of 18.13 providing a possible early entry.
Carnival has an 88 Composite Rating. Stocks have a 63 EPS rating as losses improved over the past nine quarters. CCL stock’s relative strength line is outside of early July highs and has a 97 RS Rating.
Payment giants Visa (V) and Mastercard started the year strong as consumer spending proved more resilient than some economists had expected. Spikes in transaction volume and cross-border payments have driven higher profits for both companies over the past four quarters.
MA shares are trading in the buy range for a flat base with a buy point of 392.20. Mastercard also has a fixed five week pattern within the buy zone offering an alternative entry at 405.19. Investors may want to use Thursday’s high of 400.63 as an earlier entry.
MA shares have an 87 Composite Rating and an 86 EPS Rating. Mastercard’s relative strength line fell from January highs and currently has a 75 RS Rating.
You can follow Harrison Miller for more stock market news and updates on Twitter @IBD_Harrison
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