AI play Oracle, Lennar and Airbnb are among this week's top stocks to watch. MercadoLibre and Cardinal Health also make the cut.
Oracle stock is working on a traditional buy point and could soon offer a trendline entry. Lennar could also provide a trendline entry. Airbnb has pulled back near a buy point. MercadoLibre is actionable from a trendline break. Cardinal Health eyes a buy point as well.
Investors should bear in mind that the stock market rally is under pressure. That suggests a cautious approach to new buys for most investors, especially when it comes to technology growth stocks.
Aside from Cardinal Health, which reports soon, none of these stocks confronts earnings volatility.
Oracle Stock: AI, Cloud Play
Shares of Oracle continue to work on a 127.54 buy point from a flat base. The flat base formed mostly above the 50-day moving average, a positive sign. Oracle stock fell 1.3% to 114.44 last week, edging below the 50-day line.
A move above the Aug. 1 high of 118.04 would offer an early entry from the 50-day average and break a downward-sloping trendline.
ORCL stock started the flat base in mid-June after an earnings gap-up.
The relative strength line for Oracle stock is not far from June highs. That is a favorable sign with the market uptrend coming under pressure.
Year to date, the software stock is up 40%.
Shares got a boost on potential gains from artificial intelligence (AI) workloads running on its cloud-computing network. Oracle's overall growth is starting to picking up as cloud-related businesses ramp up and account for a growing share of the overall business.
IBD named Oracle stock of the day on Aug. 1.
Oracle screens solidly in terms of key IBD ratings. It earns a Composite Rating of 90, EPS Rating of 88 and RS Rating of 92, all out of a best-possible 99.
The 92 Relative Strength Rating means that ORCL stock has outperformed 92% of all stocks in IBD's database over the past 12 months.
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Lennar Stock: New Home Boom
Shares of Lennar are finding support at the 50-day/10-week line, which is trending higher. A move above the 21-day exponential moving average for Lennar stock would offer an entry and also break a short trendline. LEN stock may be starting to work on a new base, but that wouldn't be finished for a few more weeks. Lennar fell 1.7% to 125.57 for the week, but rose 2.4% on Friday.
Despite their recent pullback, Lennar shares hold a 39% gain year to date. The homebuilder bears a Composite Rating of 87, EPS Rating of 74, and RS Rating of 91. Earnings came in strong for its latest quarter and the company also gave strong guidance.
Amid steep interest rates, existing homeowners don't want to sell. So the market for new homes is booming. Lennar was IBD Stock Of The Day on Friday.
Airbnb Stock: Travel Bug Is Back
Shares of Airbnb have fallen back below a 144.63 buy point, cleared in July. An 8.6% weekly tumble to 140.17 after a five-week rally means that ABNB stock is no longer far extended from the 50-day line.
The 144.63 buy point is still actionable, though a longer pause would be helpful.
Airbnb stock dipped 0.5% to 140.17 after hitting resistance around the buy point. That's despite strong earnings Thursday night. The online booking stock bears a 64% gain year to date.
Airbnb offers a Composite Rating of 99, EPS Rating of 80 and RS Rating of 88. It's seeing strong earnings growth as travel continues to recover from the pandemic era.
MercadoLibre Stock: Latin E-commerce
Shares of MercadoLibre sit less than 5% below a 1,365.64 buy point from a cup-shape base. The cup base formed around the 50-day line and includes a sharp earning surge in heavy volume on Aug. 3.
MELI stock's 13.6% post-earnings move Aug. 5 saw it vault above the 50-day line and clear a 1,248.77 early entry.
Shares fell 2% to 1,296.16 on Friday. Still actionable, investors also could see if MELI stock forges a handle, lowering the official buy point.
Including its rally in August, MercadoLibre has risen 53% so far this year.
The company is benefiting from the growth of e-commerce and digital payments in Central and South America. It has been called the Amazon of Latin America.
The e-commerce stock shows a Composite Rating of 96, EPS Rating of 82, and RS Rating of 83.
MELI was Thursday's IBD Stock Of The Day. It's also on SwingTrader.
Cardinal Health Stock: Surging surgeries
Shares of Cardinal Health have been drifting lower over the past few weeks. Cardinal Health stock now shows a flat base with a 95.10 buy point.
A move above the Aug. 3 high of 94.19 would offer a slightly earlier entry. CAH stock edged down 0.5% to 91.25 for the week, including Friday's 2.7% drop.
Despite its recent sideways drift, the medical devices and drugs supplier is up 19.6% year to date.
It reports earnings Aug. 15. Peer McKesson jumped on an earnings and revenue beat Aug. 3.
The industry group has been acting well. Older people are seeking out hip and knee replacements again after a pandemic pause, benefiting medical device companies.
Cardinal Health stock carries a Composite Rating of 92, EPS Rating of 78, and RS Rating of 86.
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 more top stock ideas, check out IBD's proprietary watch lists, like the IBD 50 and IBD Big Cap 20.
