Fueled by an earnings beat and new AI narrative, Alphabet gapped up beyond buy range Friday, securing a spot on the IBD Breakout Stocks Index. Shares of Google stock remain extended, but have come off recent highs, highlighting recent pressure and volatility in the market indexes.
With the tech-heavy Nasdaq so far failing to overcome resistance at its 50-day moving average, the IBD Breakout Opportunities ETF also now trades below that benchmark line and just shy of its earlier 33.90 buy point.
Updated weekly, the BOUT ETF tracks companies on the IBD Breakout Stocks Index, enabling investors to own a basket of leading growth stocks like Alphabet with a single trade.
The IBD Breakout Stocks Index currently features 25 components, including Google stock, IPO Leader First Watch Restaurant, Palo Alto Networks, NXP Semiconductors and Novo Nordisk.
Several of these stocks trade in or near new bases or buy zones.
While monitoring the action in individual stocks to watch, investors should also keep an eye on IBD's recommended market exposure level. After a spat of fluctuation due to some market volatility, the current recommended exposure level stands at 20%-40%.
See Who Joins Alphabet On The IBD Breakout Stocks Index
Google Stock, Novo Nordisk, IPO Stock In Focus
As the Nasdaq tried but failed to retake its 50-day line and the 16,000 mark, components of IBD Breakout Stocks Index offer a mix of verve and volatility.
After gapping up to more than a 10% one-day gain on Friday, Google stock has pulled back to partially fill that gap. But the search, cloud computing and artificial intelligence giant remains extended at 8% above its 153.78 buy point. The stock was up over 2% during Wednesday's session, but eased back to close just fractionally higher.
Denmark-based drugmaker Novo Nordisk has formed a fourth-stage flat base with a 138.28 entry. Such late-stage formations entail more risk, particularly in choppy markets. Plus, the stock has already made a big move since breaking out a year ago. The company is on tap to report earnings on Thursday as it finds support at its 50-day line.
First Watch Restaurant, which had is IPO in October of 2021, has rebounded from its initial slump to serve up a new buy zone. On Tuesday, the operator of more than 500 restaurants in 29 states briefly cleared but closed just below a 25.53 buy point in a double bottom, a common pattern in choppy markets. FWRG stock also offers a 25.88 entry from its prior high. With its relative strength line already hitting a new high, the company reports earnings on May 7. As of Wednesday's close, the stock is on pace for more than a 5% gain for the week.
On Tuesday, NXP Semiconductors broke out after etching a double bottom with a 251.96 buy point. On Monday's earnings report, the chipmaker posted a better-than-expected outlook. On Wednesday, the stock reversed lower to close below the earlier buy point. Its RS line remains around a new high.
A slew of other growth stocks to watch are also forming new setups, including AeroViroment, Alkami Technology and DaVita, which now trades just 1% shy of its 141.54 buy point.
More Growth Stocks To Watch
Featured in this column on April 24, aerospace leader Heico has launched a breakout. With earnings due May 28, the stock remains in buy range after clearing a 200.64 buy point.
HubSpot — profiled in the IBD Stock Analysis last week — failed to gain traction from an April 4 breakout. After clearing a 660 entry, the AI-driven enterprise software firm has now pulled back below its 50-day moving average. See if HubSpot can recharge when the company reports earnings on May 8.
IBD Breakout Opportunities ETF
The IBD Breakout Opportunities ETF from Innovator Capital Management tracks the IBD Breakout Stocks Index. As with other index ETFs, this fund allows you to invest in the entire index in addition to, or rather than, buying individual stocks. Learn more here about the ETF and Innovator.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
