by boeing (BA), Monolithic power systems (MPWR) and Work day (WDAY) are this week’s top stocks to watch as they work at traditional buy points or offer early entries. Lennar (LEN) and Aehr Test Systems (AEHR) also do the cutting.
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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 lineup that is starting to go uphill. A rising RS line means a stock is outperforming the S&P 500.
MPWR shares have found a place on the IBD SwingTrader.
Both WDAY and Monolithic Power stocks make the IBD 50 list of top growth stocks.
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BA stock
Boeing shares have a new flat base with a buy point of 221.43 after Friday. Stocks have been consolidating over the past month after a big run since the end of September. BA shares are below the 50-day line, but a strong move above the 50-day topping the March 14th high of 213.56 would offer an early entry into the trend line.
BA shares were down 1% to 201.05 for the week. The RS line is not far from a 52-week high.
Aviation and defense giant Dow Jones rose in 2023 as commercial air travel recovers and its order pipeline widens.
This is fueling Boeing’s earnings. Analysts polled by FactSet expect Boeing earnings of four cents in 2023, a big improvement from a loss of $11.06 in 2022. In 2024, Wall Street sees Boeing earnings of $5.80 a share.
The planemaker has suffered in recent years from the impact of the Covid pandemic on travel and a series of setbacks on major aircraft, including the 787 and 737.
Boeing screens mixed in terms of important IBD ratings. It earns a composite IBD rating of 73, EPS rating of 26, and RS rating of 93, all out of 99, as good as it gets.
A Relative Strength Rating of 93 means that BA stocks have outperformed 93% of all stocks in the IBD database over the last 12 months.
MPWR Shares
Monolithic Power continues to build a deep handle cup with a buy point of 530.85, up nearly 2% to 488.31 for the week.
Earlier last week, MPWR stock found support at the 10-week line on Monday and rebounded from the 21-day exponential average on Thursday. A move above the March 9th high of 516.69 may offer an early entry.
The RS line hit an all-time high in recent days, a bullish sign ahead of a possible breakout.
The fabless chipmaker belongs to the IBD Long-Term Leaders watch list.
Its technologies power energy solutions across a wide range of industries and applications, including industrial, telecom infrastructure, cloud computing, automotive and consumer applications.
MPWR stock has a perfect rating of 99 Comp and 99 EPS, as well as a rating of 93 RS.
Monolithic Power’s earnings are up 67% in 2022. They are expected to slow to a 6% gain in 2023, then recover to 18% growth next year.
Market Rally Split: Big Bank to First Republic Weekend, Credit Suisse
WDAY stock
Workday stock has a new flat basis with a buy point of 193.74. They are still in range from an earlier breakout after an entry at 184.60 from a cup-shaped base. Investors can also use this week’s rebound from the 50-day and 21-day lines as an early entry.
WDAY shares rose 5.9% last week to 188.77. The RS line is rising to a 10-month high.
The Workday stock has a composite rating of 98, EPS rating of 93, and RS rating of 87.
Late last year, the enterprise software maker raised its subscription revenue guidance to 2023. The company sells software for human capital management, such as payroll tools. Also, it expanded into financial software.
Earnings per workday are expected to rebound 40% for the full year. They fell nearly 9% last year amid a bear market for technology stocks.
LEN stock
Lennar stock is working at a flat base buy point of 109.38. They rebounded on Thursday near the 50-day line to offer an early entry. On Wednesday, LEN stock initially rose following strong results and guidance from Lennar, but reversed lower.
But weekly action was strong: Lennar shares surged 6.3% to 103.50, rebounding from the 50-day line. Its RS line rose to a 52-week high.
The builder has a 97 Comp Rating, 87 EPS Rating and 94 RS Rating.
Last year, Lennar suffered in a tough real estate market. Rising interest rates weighed on demand from homebuyers and new orders slowed. Challenges remain, but it expects to benefit from a significant housing shortage, especially worker housing.
Lennar’s earnings were up 10% in 2022 but down 21% in the fourth quarter. They are expected to decline by 37% in 2023 before rebounding by 9% next year.
AEHR stock
Aehr Test Systems has a new base with a buy point of 37.67.
AEHR shares fell 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 could offer an early entry. AEHR stocks are prone to wild moves, so it’s probably best to look for early entries rather than traditional breakouts.
The RS line flattened out after shooting up to the highs.
The semiconductor equipment manufacturer receives a compound rating of 99, a rating of 78 EPS, and a rating of 99 RS.
Electric vehicles (EVs) are driving strong revenue growth for Aehr Test Systems.
The Fremont, Calif.-based company manufactures semiconductor reliability qualification and test equipment. Aehr’s biggest growth comes from systems for testing and firing silicon carbide, or SiC, chips to power EVs. Burn-in is a stress test of a component to detect problems.
Aehr’s earnings grew in the last fiscal year. They more than tripled in the last quarter and are about to jump 42% for the full year.
For more quality stocks with strong RS lines, check out IBD’s Relative Strength At New High stock list. Our MarketSmith stock research platform also has a screening tool for stocks with RS lines making new highs.
For other great stock ideas, check out IBD’s proprietary watchlists such as the IBD 50 and IBD Big Cap 20.
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