The market dropped back into correction territory this week with an ugly sell-off, with the S&P 500 falling to a three-month low. For now, investors should build their watchlists for a rebound and focus on stocks with strong relative strength lines. META stock, General Electric (GE), Arch Capital Group (ACGL), Vertex Pharmaceuticals (VRTX) and Bunge (BG) are worth keeping an eye on from the sidelines as they show resilience.
The names included on this week’s list of stocks to watch are all nearing buy points. But investors should wait for evidence that a new market rally has real momentum, with a follow-through day to confirm the uptrend. If the major indexes continue to slide, even the most resilient stocks will buckle.
Facebook parent Meta Platforms (META) is on the IBD Leaderboard list of leaders near buy points. The tech behemoth is among the many companies planning to integrate artificial intelligence into its business. In August, Meta rolled out its Code Llama with Microsoft (MSFT), a large language learning model (LLM) that can use text prompts to generate and discuss code for research and commercial use.
Meta kicked its losing streak of six consecutive earnings declines with its Q2 results in late July. The company topped estimates with a 32% earnings jump to $2.98 per shar. Revenue rose for the second quarter in a row, accelerating 11% to $32 billion.
For the full year, analysts expect EPS to more than double, signaling huge gains in the second half.
META stock wedged higher in light volume for several weeks to mid-September, following the 50-day moving average. So a recent pullback offered a constructive pullback. Meta is now trading in a cup-with-handle base with a 312.87 buy point.
Shares swung 1.1% higher Friday to 299.08, but failed to close back above the 50-day line.
META stock has a near-perfect 98 Composite Rating out of a best-possible 99. The Composite Rating combines various technical indicators into one easy-to-read score. The internet giant has an 86 EPS Rating. The stock’s relative strength line climbed to a 52-week…