Boeing (BA), Monolithic Power Systems (MPWR) and Workday (WDAY) are this week’s top stocks to watch as they work on traditional buy points or offer early entries. Lennar (LEN) and Aehr Test Systems (AEHR) also make the cut.
The stock market is in a correction, making this a time to build watch lists.
Most of this week’s top stocks have relative strength lines that are moving sideways, a sign of resilience in the current volatility. Lennar has an RS line that is starting to trend upward. A rising RS line means that a stock is outperforming the S&P 500.
MPWR stock has found a spot on the IBD SwingTrader.
Both WDAY stock and Monolithic Power belong to the IBD 50 list of top growth stocks.
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Boeing stock has a new flat base with a 221.43 buy point after Friday. Shares have been consolidating for the past month after a huge run from late September. BA stock is below the 50-day line, but a strong move above the 50-day, clearing the March 14 high of 213.56, would offer an early, trendline entry.
BA stock fell 1% to 201.05 for the week. The RS line is not far from a 52-week high.
The Dow Jones aviation and defense giant has surged in 2023 as commercial air travel recovers and its order pipeline swells.
That is fueling Boeing earnings. Analysts polled by FactSet expect Boeing earnings of four cents in 2023, a vast improvement from a loss of $11.06 in 2022. In 2024, Wall Street sees Boeing earnings of $5.80 a share.
The airplane maker had suffered the past several years from the Covid pandemic hit to travel and a series of setbacks to key aircraft, including the 787 and 737.
Boeing screens mixed in terms of key IBD ratings. It earns an IBD Composite Rating of 73, EPS Rating of 26 and RS Rating of 93, all out of a best-possible 99.
The 93 Relative Strength Rating means that BA stock has outperformed 93% of all stocks in IBD’s database over the past 12 months.
Monolithic Power continues to build a deep cup-with-handle with a 530.85 buy point, rising nearly 2% to 488.31 for the week.
Early last week, MPWR stock found support at the 10-week line on Monday, then reclaimed the 21-day exponential average Thursday. A move above the March 9 high of 516.69 could offer an early entry.
The RS line has hit a record high in recent days, a bullish sign ahead of a possible breakout.
The fabless chipmaker belongs to the IBD Long-Term Leaders watchlist.
Its technologies drive power solutions across a wide range of industries and applications, including industrial applications, telecom infrastructure, cloud computing, automotive, and consumer.
MPWR stock carries a perfect 99 Comp Rating and a 99 EPS Rating as well, besides a 93 RS Rating.
Monolithic Power earnings boomed 67% in 2022. They are seen slowing to a 6% gain in 2023, then rebounding to 18% growth next year.
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Shares of Workday have a new flat base with a 193.74 buy point. They are sill in range from an earlier breakout past a 184.60 entry from a cup-shaped base. Investors could also use this week’s bounce off the 50-day and 21-day lines as an early entry.
WDAY stock popped 5.9% last week to 188.77. The RS line is rising, to a 10-month high.
Workday stock bears a Composite Rating of 98, EPS Rating of 93 and RS Rating of 87.
Late last year, the enterprise software maker raised subscription revenue guidance for 2023. The company sells software for human capital management, such as payroll tools. Also, it has expanded into financial software.
Workday earnings are expected to rebound 40% for the full year. They declined nearly 9% last year amid the bear market for technology stocks.
Shares of Lennar are working on a 109.38 flat-base buy point. They rebounded Thursday from near the 50-day line to offer an early entry. On Wednesday, LEN stock initially rose following strong Lennar earnings and guidance, but reversed lower.
But the weekly action was strong: Lennar stock popped 6.3% to 103.50, rebounding from the 50-day line. Its RS line has risen to a 52-week high.
The homebuilder shows a 97 Comp Rating, 87 EPS Rating and 94 RS Rating.
Last year, Lennar suffered in a tough housing market. Rising interest rates weighed on homebuyer demand and new orders declined. Challenges remain, but it expects to benefit from a significant shortage of housing, especially workforce housing.
Lennar earnings rose 10% in 2022, but fell 21% in Q4. They are expected to plunge 37% in 2023 before rebounding 9% next year.
Aehr Test Systems has a new base with a 37.67 buy point.
AEHR stock ran 10.3% to 32.25 last week, closing just above the 21-day and 50-day lines. A rebound above Friday’s high of 33.84 might offer an early entry. AEHR stock is prone to wild moves, so it’s probably best to look for early entries vs. traditional breakouts.
The RS line has flattened out after bolting to highs.
The semiconductor equipment maker earns an 99 Composite Rating, a 78 EPS Rating and a 99 RS Rating.
Electric vehicles (EVs) are driving big revenue growth for Aehr Test Systems.
The Fremont, Calif.-based company makes semiconductor test and reliability qualification equipment. Aehr’s biggest growth comes from systems for test and burn-in of silicon carbide, or SiC, power chips for EVs. Burn-in is a stress test of a component to detect problems.
Aehr earnings boomed last fiscal year. They more than tripled in the latest quarter and are poised to jump 42% for the full year.
For more quality stocks with strong RS lines, check out IBD’s Relative Strength At New High stocks list. Our stock research platform MarketSmith also has a screening tool for stocks with RS lines making new highs.
For other great stock ideas, check out IBD’s proprietary watch lists, like the IBD 50 and the IBD Big Cap 20.
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