As the stock market uptrend faces mounting pressure, some leading stocks, including Dow Jones software giant Salesforce, triggered sell signals in recent sessions. Meanwhile, top stock On Holding plunged in today's stock market action.
The diverging trends of the major stock market indexes make it hard to detect a clear trend. While the market remains uncertain, investors can still be invested 60% to 80% in stocks. Taking some profits is the best strategy right now.
Investors should be focusing on stocks that are holding up the best during the ongoing market volatility. And it is crucial to stay on top of sell signals. Some market leaders are flashing such signals.
Dow Jones Stock Triggers Sell Rule
On July 12, Salesforce broke out past a flat base's 225 buy point, according to IBD MarketSmith chart analysis. One week later, the stock had rallied 6% past the entry, and the breakout looked on track.
But the stock quickly ran into headwinds. Three days later, those gains were entirely gone. And last week, CRM stock triggered the 7% loss rule, indicating the breakout had failed.
ONON Stock Plunges On Earnings
Swiss shoemaker On Holding plunged below a 33.68 cup-with-handle buy point and other key levels after Q2 earnings fell short and guidance pointed to sales growth continuing to slow. ONON stock had doubled in 2023 before the report.
The parent of On Running reported adjusted earnings that plummeted 66% to 5 cents per share, compared to 15 cents per share last year. Revenue leapt 64.5% to $505 million, a torrid pace but slowing for a second straight quarter.
Analysts expected On Running earnings of 13 cents per share, on a 55.7% revenue spike to $477.5 million.
ONON stock dived nearly 14% midday Tuesday. Shares triggered the 7% loss rule from the 33.68 entry and they broke down below their 50-day line, another sell signal.
ASML, Copa Continue To Slide
Other stock market leaders in trouble include leading chip equipment maker ASML and Panama-based Copa Airlines.
ASML stock is trading more than 10% below a flat base's 747.13 buy point following sharp losses in the past few weeks. Previously, shares broke through their 50-day line on July 20, which was an early sign of weakness and a good reason to exit the stock quickly.
Copa Airlines has triggered the round-trip sell rule. On July 31, CPA stock rallied as much as 24% past a 98.12 buy point. Investors should take at least some profits at the 20%-25% area.
But Copa shares gave up the entirety of that double-digit gain. The round-trip sell rule tells investors to avoid further losses instead of panicking over lost gains.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on top growth stocks and the Dow Jones Industrial Average.
