The best stocks to watch offer telltale clues as they prepare to launch breakout moves. The key is to identify those clues while also managing risk. Here's a look at 19 top stocks setting up buy points or buy zones, including Microsoft, STMicroelectronics, Cadence Design Systems, Palo Alto Networks and Texas Roadhouse.
Homebuilders Meritage Homes, PulteGroup, Lennar, Tri Pointe Homes and Taylor Morrison also make this stock screen.
Hershey, Academy Sports & Outdoors, Copart and SciPlay have also found a sweet spot on the list.
To make this screen, each of these stocks to watch must meet the following criteria:
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- Composite Rating of at least 90.
- EPS Rating of at least 80.
- RS Rating of at least 80.
- Accumulation/Distribution Rating A, B or C.
- Price vs. 21-day moving average at least 1%-5%.
- RS line within 5% of new high.
- Price vs, 50-day moving average at least 10%.
- 10-day line above 21-day line, which must be above 50-day line.
- Current price at least $12.
- Average daily volume over 400,000 shares.
| Company | Symbol | Comp Rating | EPS Rating | RS Rating | SMR Rating | A/D Rating |
|---|---|---|---|---|---|---|
| Meritage Homes | 99 | 97 | 96 | A | B- | |
| Palo Alto Networks | 99 | 97 | 91 | A | A- | |
| Cadence Design Systems | 98 | 97 | 93 | A | B+ | |
| PulteGroup | 98 | 99 | 95 | A | C | |
| STMicroelectronics | 98 | 98 | 95 | A | C | |
| Tri Pointe Homes | 98 | 97 | 95 | B | B | |
| SciPlay | 97 | 93 | 92 | B | B | |
| Copart | 96 | 90 | 92 | A | B+ | |
| Lennar | 96 | 87 | 92 | B | B- | |
| Taylor Morrison Home | 96 | 98 | 95 | B | C- | |
| Texas Roadhouse | 96 | 84 | 92 | A | B+ | |
| Wingstop | 96 | 98 | 98 | - | B- | |
| CBOE Global Markets | 95 | 86 | 84 | A | B+ | |
| Hershey | 95 | 88 | 86 | A | A | |
| Microsoft | 94 | 85 | 83 | A | A- | |
| Bruker | 92 | 89 | 92 | B | C- | |
| Academy Sports & Outdoors | 91 | 93 | 96 | C | B- | |
| Thomson Reuters | 91 | 98 | 90 | C | B- | |
| Takeda Pharmaceutical | 90 | 89 | 87 | C | B- |
Data as of March 29, 2023
MSFT Among Stocks To Watch In Or Near A Buy Zone
While not buy recommendations, the screen above highlights MSFT stock, PANW stock and other companies showing both fundamental and technical strength.
But given the current market correction, buying stocks in this environment is risky. The odds of a successful and sustained breakout are much better in a strong uptrend.
Several of these leading stocks to watch are also featured on IBD stocks lists because of their strength across key stock ratings and metrics.
With their track records of stable earnings growth and enduring relative strength, CDNS and MSFT stock earn placement on IBD Long-Term Leaders. CDNS stock also lands a spot on the IBD Big Cap 20.
The IBD 50 has a slew of names on this screen, including Cadence, PulteGroup, Meritage Homes, Tri Pointe and Copart.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
