Investors trying to pick stocks in February find themselves in a more uncertain and murky stock market. The euphoria of Inauguration Day has withered, and President Donald Trump's tariffs and persistent inflation are taking the shine off corporate outlook this earnings season. Meanwhile, the DeepSeek news landed late January, a bolt out of the blue that wreaked havoc on the Magnificent Seven.
As a result, the S&P 500 has barely budged this month, based on Friday's closing price, as tariffs target significant sectors.
In times such as these, stock screeners can help sift through the thousands of stocks to narrow the potential winners to a handful. Investors can narrow those to stocks near proper buy points or ones rebounding from their 50-day moving average, using MarketSurge, Investor's Business Daily's premium research tool.
Three stocks are noteworthy as they hit the IBD stock screens.
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Not only are they near buy points, but their relative strength line is at a new high. This technical measure of a stock's performance makes it easy to compare its action with that of the benchmark S&P 500 and can be seen on IBD MarketSurge's daily and weekly stock charts. When the stock does better than the index, the relative strength line rises.
Stock Market: Root Hits A Buy Zone
Insurance stock Root is in a buy zone above a buy point of 113.22. On IBD MarketSurge, the blue dot gives away its relative strength which has risen to a new high. That promises a strong breakout since it also indicates that funds are buying shares. Root stock is also in an early stage base, which frequently leads to strong gains.
The insurance company turned profitable in the September quarter, but is expected to show a loss for fiscal 2024 and 2025. Investors should make note of this. Still, according to IBD Stock Checkup, Root has a best-possible Relative Strength Rating of 99.
Commvault Systems is breaking out at a buy point of 178.72. This computer software-database stock also has the added benefit of being in an early-stage base as the relative strength line rises to a new high for the year. Shares are also near their all-time high after rallying on third-quarter results.
Descartes Breaks Into A Buy Zone
Descartes System Group also has run up to its all-time high and broken into a buy zone from an early-stage base. The bullish action finds even more support in the blue dot on its chart. The buy zone goes up to 126.82. The enterprise software company provides supply chain management software for businesses.
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A quick check on MarketSurge shows all three are outperforming the S&P 500 in February. Root gained a whopping 15% while Commvault stock made an impressive 10% gain. Descartes System Group has risen 3.4%.
Root stock is on the growth IBD 50 list, Commvault is the leader in the IBD database software group while Descartes System heads the specialty software group.
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