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Table of Contents:
- Airbnb (ABNB)
- DraftKings (DKNG)
- Costco Wholesale (COST)
- Argenx (ARGX)
- ServiceNow (NOW)
The stock market endured a rough stretch last week, with the S&P 500 falling below its 50-day moving average on Friday. This signals the powerful rally since mid-June is losing steam and raises the risk of a larger pullback.
Surging bond yields remain the biggest headwind, as the 10-year Treasury yield hovers near 15-year highs above 4.3%. All eyes are on the Federal Reserve’s pivotal meeting this week. While a rate hike is off the table, the Fed’s outlook on future hikes and the economy could significantly impact markets.
Despite recent volatility, some leading growth stocks are carving out buy points and holding near potential entries. Airbnb, DraftKings, Costco, Argenx, and ServiceNow are five names exhibiting relative strength worth watching.
This article analyzes the latest bullish catalysts for each stock. It also covers their technical setups, including buy points and other key levels to monitor. With the right market conditions, these stocks could make significant moves in the weeks ahead.
Airbnb just joined the S&P 500, a huge milestone further validating its position as a major travel disrupter.
The home rental platform is gaining lodging share from hotels. Airbnb’s average daily rates only ticked up 1% last quarter, but its active listings jumped 19%. This suggests strong demand from travelers.
Analyst Richard Clarke at Bernstein sees Airbnb as the fastest-growing online travel agency once again. He predicts its revenue growth re-accelerating after the pandemic stalled its expansion.
ABNB stock has a 151.16 cup-with-handle buy point, according to MarketSmith’s weekly chart. The daily chart shows a 154.95 cup base buy point, with a lower handle likely forming this week.
On Friday, ABNB stock dipped 0.95% to 142.75, but held above its 21-day exponential moving average. Shares are just 2.1% off their 52-week high, exhibiting relative strength even as markets pulled back last week.
As more states legalize sports betting, DraftKings is rapidly gaining market share while also expanding into online casino gaming.
DraftKings just launched a new Pennsylvania casino app, while also reporting its first-ever profitable quarter in Q2. Revenue growth accelerated to 88% from 81% the previous quarter.
Multiple analysts cited DraftKings’ market-leading top-line growth when upgrading their ratings or price targets in recent weeks. DKNG stock has a 32.65 cup-with-handle buy point.
Shares dipped 1.4% on Friday to 31.04, closing just 2.5% off their 52-week high. DKNG stock held above its 21-day line, finding support at this key level. Its relative strength line is right near a 52-week high, signaling outstanding performance vs. the S&P 500.
Costco Wholesale (COST)
Costco reported accelerating sales growth in July and August, even as it contended with Amazon Prime Day. Analysts see its steadfast membership model fueling continued outperformance.
UBS pointed to Costco’s defensive qualities among retailers, with its recession-resistant consumables and services. Costco also holds leverage in negotiations with vendors struggling with excess inventory.
An Evercore ISI analyst estimates Costco’s fiscal Q4 revenue coming in $500 million above views after strong August sales. Numerous analysts have boosted their COST stock price targets in recent weeks.
Shares dipped 1.5% Friday to 556.36, but climbed 0.9% on the week. COST stock has a 571.16 flat base buy point. Its weekly chart shows this base is an extension of its consolidation going back to August 2022.
Argenx has soared this summer after positive trial results for its drug Vyvgart in treating chronic inflammatory demyelinating polyneuropathy (CIDP).
Analysts called Vyvgart a “game-changer” with its ability to significantly reduce relapse rates in CIDP patients. With a $3 billion revenue opportunity in CIDP alone, ARGX stock carries huge growth potential.
On Friday, European regulators recommended full approval for an under-the-skin version of Vyvgart. ARGX stock rose 0.9% to 527.98, climbing 3.6% on the week. Shares are building the right side of a 550.76 cup base buy point.
ARGX has found reliable support at its 21-day exponential moving average amid recent market turbulence. Its RS line is right near highs, signaling market-leading strength.
ServiceNow stands out for its steady earnings and sales growth even as other enterprise software firms stumble. It’s also making major AI investments to expand its addressable market.
HSBC initiated coverage with a buy rating and $704 price target, preferring ServiceNow’s cloud and digital transformation exposure over peers. Its Services business also gives it resilient revenue streams.
NOW stock has a 607.90 cup-with-handle buy point. Shares fell 1.8% Friday to 579.58, closing 3.4% off highs for the week. NOW held above its 50-day moving average, defending this key support level.
With the Fed decision looming, volatility is likely to remain elevated in the near term. However, leading growth stocks sitting near buy points could be poised for major runs if the rally resumes.
Airbnb, DraftKings, Costco, Argenx, and ServiceNow all have constructive bases and are exhibiting relative strength. Savvy investors should have these names on their watchlists, ready to pull the trigger when the market confirms the uptrend is back on track.
Proper buy point entry and sound risk management will be key to navigating any whipsaws. But sticking with market leaders as they emerge from bases improves the odds of significant gains in a sustained advance.
Q: When will these stocks trigger buy signals?
A: These stocks need to break out of their base patterns highlighted above. Wait for a convincing move above the correct buy point before entering a position. Do not chase shares more than 5% above the proper entry.
Q: Are these stocks buys right now?
A: No, they are not actionable at the moment. Wait for proper buy points to be triggered. Buying stocks extended above bases rarely works out. Manage risk by patiently waiting for strength to be confirmed.
Q: What if the market corrects lower?
A: Use sell rules to cut losses short if the stocks start breaking down. A drop below the 50-day line or breaking the base’s low would likely warrant exiting the position. Protect capital by not riding stocks down in a weakening market.
Q: How much upside do these stocks have?
A: The upside potential is substantial if the market uptrend resumes and growth stocks return to favor. However, always take profits methodically as shares climb higher. Consider selling partial positions into strength and moving up trailing stops to lock in gains.
Q: Are these stocks good long-term investments?
A: Many of these innovators disrupting their industries have promising long-term prospects. But it’s critical to follow sound sell disciplines and routine portfolio reviews. Cut laggards and losers to concentrate holdings in top performers over time.