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Even as the S&P 500 endured its worst month this year in September, dropping 4.9%, some stocks have defied the market weakness and held their ground. Energy giant Exxon Mobil and AI-focused chip design firm Synopsys lead a handful of stocks that remain near buy points, having weathered last month’s volatility.

Exxon Mobil (XOM) and Synopsys (SNPS) top the watch list, along with retail juggernaut Costco Wholesale (COST), language learning app maker Duolingo (DUOL) and supplemental insurance provider Aflac (AFL). Keeping their composure as the S&P 500 slipped, these stocks have shown relative strength in a turbulent market.

With U.S. stocks still searching for direction, investors should remain cautious and wait for a confirmed uptrend before making new buys. The S&P 500 ended September 6.6% below its August peak, though it has rebounded 19.9% from its October 2022 bear market low. Carefully reviewing the daily market analysis in IBD’s The Big Picture can help investors align with prevailing trends.

Exxon Defies Oil Volatility

Exxon Mobil enjoyed gains of 5.75% last month as oil crossed $90 per barrel, easily outpacing the S&P 500’s decline. Saudi Arabia and Russia opted to continue their production cuts of 1.3 million combined barrels per day through year-end. While reduced output could squeeze supply amid slowing demand, for now it has supported higher prices.

Beyond just benefiting from lofty oil, Exxon has significantly improved its own cost structure. The company is on pace to realize $9 billion in expense savings for 2022 compared to 2019. These leaner operations helped Exxon double Q2 profits over where they stood five years ago under similar commodity prices.

After pulling back 1.6% on Friday to 117.58, XOM stock edged just below a 118.84 buy point. The entry triggered briefly midweek when shares rallied 3.3% on above-average volume. The buy point comes from a 21-week cup-with-handle base, according to MarketSmith chart analysis.

Synopsys Rides AI Wave

Synopsys provides electronic design automation software vital to chipmakers. Its tools have become more coveted as firms seek to capitalize on artificial intelligence applications. Upbeat guidance from Nvidia in May citing strong generative AI demand lit a fire under AI stocks like Synopsys.

In August, Synopsys reported record fiscal Q3 results, with its AI opportunity already taking hold. “We achieved another record quarter as semi design starts and R&D investments continue, unabated, to capitalize on the AI-drive ‘Smart Everything Era,’” said CEO Aart de Geus.

On Thursday, SNPS stock surged 3.1%, breaking a downtrend and retaking its 50-day line. Shares vaulted to a new high on Friday, clearing a 471.15 buy point before paring gains to close 0.4% lower at 458.97.

Costco Defensive Amid Slowdown

Costco has hovered just below a buy point, rallying 1.9% on Wednesday after its fiscal Q4 report initially disappointed some investors hoping for the first membership fee hike in six years. But analysts noted members are making more frequent trips and spending on basics, making Costco a defensive retailer if consumers pull back.

COST stock dipped 0.65% Friday to 564.96, sitting 1% below a 571.16 flat base buy point. The consolidation is just above the top of a longer base. Costco saw growth in traffic and market share even as big ticket discretionary purchases slowed.

Duolingo Takes Off

Duolingo, a top language learning app, saw its stock take flight Friday with a 4.2% surge. Shares cleared the 165.87 entry from a double bottom base and went on to hit 174.70 before closing just shy of the 167.35 handle buy point.

The relative strength line for DUOL stock is approaching 52-week highs. Duolingo turned profitable last quarter as revenue grew over 40% for the fourth straight report. Paying subscribers soared 59% to 5.2 million.

CEO Luis von Ahn said Duolingo is “at the start of monetizing” its large user base, including through new premium features leveraging generative AI.

Aflac Nears Inflection Point

Aflac has found reliable support at its 21-day exponential moving average while holding a buy point at 78.43. Shares are actionable just above the 78 level. AFL stock rose 1.2% Friday to 76.75, extending its tight trading range.

Analysts anticipate the supplemental insurer is nearing an inflection point where year-over-year revenue growth could turn positive after a long stretch of declines. Aflac seeks growth from newer products beyond its cornerstone cancer insurance, such as policies covering dental, vision, life and disability.

Bottom Line

With the market direction still unclear, investors should remain selective and wait for a confirmed uptrend signal before making new buys. But stocks like Exxon, Synopsys, Costco, Duolingo and Aflac have shown resilience amid recent volatility. Keeping them on your watch list could pay off if the S&P 500 can find its footing.

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