What connects these five stocks? All five are IBD Long-Term Leaders. PayPal stock is in range of an early buy point, while the other four are close to breaking out. But they’re also hovering near their 50-day lines.
Long-Term Leaders are more mature names with solid, stable earnings growth, price performance and solid institutional backing. Because these tend to be less-explosive stocks, buying Long-Term Leaders near their 50-day line can be a better strategy.
Investors can buy stocks within 10% of their 50-day line. But with this year’s choppy market, it’s generally better to buy closer to the trigger point, whether it’s the 10-week line, early entry or traditional buy point.
Microsoft, PayPal and Google stock are on IBD Leaderboard as well.
PayPal stock rose 1.9% to 283.38 in the stock market on Friday, advancing 4.4% for the week. The stock has an official buy point of 309.24. But it’s cleared an early entry of 277.96, just above its mid-April short-term high. Volume picked up on Thursday and especially Friday as PYPL stock cleared the resistance area.
Shares are 7.9% above their 50-day line, far more than the other Long-Term Leaders highlighted here.
The relative strength line is off highs, which is OK because so is PayPal stock. But the RS line is at the best level since early March. The RS line, the blue line in the charts provided, tracks a stock’s performance vs. the S&P 500 index.
PayPal’s most recent round of earnings beat estimates, helped by Bitcoin transactions and government stimulus.
PayPal stock was Friday’s IBD Stock Of The Day.
Microsoft stock fell 0.6% to 259.43. Shares edged up 0.6% for the week, the fourth straight weekly gain. MSFT stock is just below a 263.29 buy point from a cup base, part of a base-on-base pattern or even a base-on-base-on-base. Shares are 2.2% above their 50-day line.
MSFT stock has an 88 Composite Rating and a 94 EPS Rating. The relative strength line is just below a consolidation high, though still considerably below last year’s all-time high
Microsoft is set to showcase its next Windows operating system this coming week.
Pool stock is in a flat base with a 449.54 buy point. Shares rose 1.3% to 442.02 on Friday. For the week, Pool stock rose 2.4%, rebounding from its 10-week line, now 3.2% above that key level.
The RS line for Pool stock is just below a consolidation high.
Pool Corp., a distributor of a variety of swimming-pool products, has vastly outpaced the big tech stocks mentioned here — Microsoft, PayPal and Alphabet — since the beginning of the bull market in 2009.
“Our sales have continued to benefit from elevated demand for residential pool products, driven by home-centric trends influenced by the COVID-19 pandemic,” the company said in its most recent earnings report in April.
Pool stock has best-possible Composite and EPS Ratings of 99.
Google stock fell 1.3% to 2,402.22 on Friday. That’s back below a 2,431.48 buy point from a flat base. GOOGL stock was trending around 4% above its 50-day line.
The stock has a 99 Composite Rating and a 94 EPS Rating. The relative strength line for Google stock is at record highs.
Entegris stock sank 2.2% to 117.24, but rose 0.7% for the week. The stock is in a cup base with a 126.51 buy point. It could be starting to form a handle, but needs several days before that forms. ENTG stock is 2.7% above its 50-day line.
The chip-gear maker has a 96 Composite Rating and a 93 EPS Rating.
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