As the market tries to conjure a new uptrend, Meta Platforms leads a whole metaverse of names looking to turn potential breakouts into reality. Meta stock joins 30 other companies on the IBD Breakout Stocks Index, including FedEx, big rig giant Paccar and enterprise software firm Manhattan Associates.
But while Meta, FedEx and the others lay down a web of buy points and possible breakouts, the market indexes continue to flash glitches in the matrix. The Nasdaq and S&P 500 showed resilience Wednesday. The Nasdaq moved higher above 13,000 and the S&P held above its 200-day line.
Paccar and Meta stock managed to find support at their 10-week moving averages as they try to complete their bases. FDX stock closed right around the 10-week benchmark.
A hawkish Federal Reserve trying to tame inflation has the IBD/TIPP Economic Optimism Index plunging to a 12-year low. The index fell 16% in October to 36.3, far below the 50 benchmark to indicate optimism.
In these conditions, investors should practice an active mix of both protection and preparation. Protect your portfolio with rules for how to sell stocks to take profits and cut losses. At the same time, stay alert for a follow-through day to spark a new uptrend. The market can turn around on a dime and the history of Wall Street shows that profits come to those who prepare ahead of time.
Featuring highly rated names like Meta stock, MANH stock, LPL Financial, Arch Capital, Okta and IMAX, the IBD Breakout Stocks Index serves as an excellent source to build your watchlist.
See Who Joins Meta Stock On The IBD Breakout Stocks Index
Two Telltale Clues For Meta Stock And More
As you review the IBD Breakout Stocks Index in this market, keep an eye on two telltale clues: the 10-week moving average and the relative strength line. Also, Meta stock, PCAR stock, FedEx, Manhattan Associates, Dorian LPG and many more all are testing support and resistance at their 10-week lines.
Featured in this column on Sept. 27, PCAR stock has trucked right along that line as it forms an early stage flat base showing a 90.05 buy point. Meta stock also clings to 10-week line as it takes aim at potential 312.87 and 326.20 entries. How Meta and others fare at that key benchmark will signal either rebounding strength or further weakness in the market.
The trajectory of the relative strength line is another key indicator. Note that the RS line for Meta stock, for instance, remains right around a new 52-week high, earning the telltale blue dot in MarketSmith. A rising relative strength line shows that stock is outperforming the general market, as represented by the S&P 500. PCAR stock also earns a blue dot.
So as investors navigate this troubled market, keep an eye on the 10-week and relative strength lines in individual stocks. When the market eventually finds its footing and begins to rise, these indicators will help identify which stocks could be poised to lead the next uptrend.
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 X (formerly Twitter) at @IBD_MGalgani.
