Dow Jones stock UnitedHealth Group, AbbVie and Shockwave Medical are this week's top stocks to watch, breaking out or setting up near buy points.
EV stock Li Auto and Dollar Tree also make the cut.
UNH stock leads the list. The health insurance giant, an IBD Leaderboard stock, reported strong earnings Friday and that lifted several other insurers.
Keep in mind that the market uptrend remains under pressure. But it's a good time to build watchlists.
Each of this week's top stocks to watch and research has a rising relative strength line. Moreover, each has an IBD Composite Rating of 94 or better, out of 99. Those traits make them ideal watchlist stocks.
IBD Live: A New Tool For Daily Stock Market Analysis
Stock Market Action: Watch The RS Line
On a weekly MarketSmith chart, the RS line for UNH stock and ABBV stock hit bullish new highs this week while in bases or breaking out, indicated by a blue circle at the end of their RS lines.
The RS line for SWAV stock also is at a new high. Li Auto and AbbVie are close.
A rising RS line, shown in blue in these charts, means that a stock is outperforming the S&P 500.
The relative strength line is a quick way to spot winners in any market — whether it's up or down.
The Relative Strength At New High stocks list highlights quality names with strong RS lines. MarketSmith, IBD's stock research platform, has a screening tool for stocks with RS lines at new highs.
UNH Stock
UnitedHealth jumped 5.4% in Friday's stock market trading to 529.75. That cleared a 518.80 handle buy point from either a cup or double-bottom base.
Earlier in the week, UNH stock retreated from that buy point but rebounded Thursday from its 50-day line.
Shares jumped Friday as UnitedHealth earnings easily beat views. Rival health insurers Centene and Humana also moved back above buy points Friday.
UNH stock shows an IBD Relative Strength Rating of 94 out of 99. That means it has outperformed 94% of all stocks in IBD's database over the past 12 months. It's also backed by a solid EPS Rating of 88 out of 99.
AbbVie Stock
Shares of AbbVie rose 2.1% Friday to 153.62. ABBV stock ended with a small weekly gain after testing its 50-day line on Thursday.
AbbVie stock has formed a double-bottom base with a 156.99 buy point. Shares have formed a handle with a midpoint that's slightly too low to be proper, but it's another sign of resistance just below 157.
AbbVie slashed its 2022 earnings outlook in April after taking an unexpected hit during the first quarter. But its portfolio of blockbusters includes immunology drugs Humira and Rinvoq, as well as cancer drug Imbruvica and a migraine treatment called Ubrelvy. It loses Humira exclusivity next year.
ABBV stock earns an RS Rating of 96 and an EPS score of 90. It grew earnings 13% on average over the past three years. It shows a three-year EPS growth rate of 18%.
Shockwave Stock
Shares of Shockwave Medical popped 5.2% Friday to 209.90, gaining 3.4% for the week.
SWAV stock cleared an early trendline entry at a 208.28, which is a dime above the July 8 high. That also was an entry for a not-quite handle.
Friday's strong price gain came on light volume though.
Santa Clara, Calif.-based Shockwave develops products to help transform treatments for calcified cardiovascular disease. For instance, its lithotripsy tool uses a series of electrical pulses to "crack" hardened calcium in blood vessels.
SWAV stock has a 93 RS Rating and a 76 EPS score.
It's a young company poised for its first full profitable year, but has been in the black for the past three quarters. But Shockwave Medical grew sales 194% last quarter and 135% over the past three years.
LI Stock
Shares of Li Auto gained 0.7% Friday but fell 1.2% to 38.45 in low volume for the week.
LI stock offers an early entry from Wednesday's bounce off the 21-day moving average. The Chinese EV stock is working on a new consolidation after more than doubling from early May to late June.
China-based Li Auto makes the Li One and the soon-to-launch L9, premium electric SUVs. Both models employ "range extenders," gas engines used to recharge EV batteries while driving.
The startup has grown EV sales at a robust pace, challenging Tesla as well as homegrown EV giants.
LI stock bears a 98 RS Rating and 76 EPS Rating. Like Shockwave, it's a young company with a few quarters in the black. It's set for its first full year of profits in 2023. Li Auto grew sales 175% last quarter and 591% over the last three years.
Dollar Tree Stock
Shares of Dollar Tree slipped 0.4% Friday but eked out a 0.4% gain to 168.08 for the week.
On July 7, DLTR stock topped a 166.45 cup-with-handle buy point. It's in buy range, which goes to just above 174.
Dollar Tree raised the prices of dollar items by a quarter to $1.25, a radical shift that is likely to boost earnings. The IBD 50 top growth stock continues to outperform as consumers squeezed by inflation look aggressively for bargains.
Dollar Tree has a 98 RS Rating and an 83 EPS Rating. Its three-year EPS growth rate of 10% is mediocre. But DLTR stock shows two quarters of earnings acceleration, capped with a 48% gain last quarter.
For more great stock ideas, check out IBD's proprietary watchlists, like the IBD 50 and the IBD Big Cap 20.
