Last week, the market returned to a confirmed uptrend, bringing a number of top stocks near buy points in the stock market today. Meanwhile, earnings season is once again here, so investors should be vigilant about potential earnings results. Earnings releases usually result in volatile price changes.
F5 Networks (FFIV) broke out past a first-stage base-on-base pattern with a 154.01 buy point Friday and remains in the 5% buy range that tops out at 161.71. The breakout day featured a 139% increase in average volume, showing strong institutional demand.
The base on base is a first-stage base, which has more upside potential than later-stage base formations. Meanwhile, the stock’s relative strength line hit a new high along with the breakout, showing strong market outperformance.
Analysts at William Blair upgraded the network solutions company from market perform to outperform based on improving business trends. Those trends could lead to better-than-expected earnings and sales in the current quarter. The company will report its fiscal-Q2 earnings results late April 25. Analysts expect earnings growth of 16% on revenue growth of 2%, vs. the year-ago period.
Interactive Brokers has had a big move since a breakout in late July. Since then, the stock has yet to significantly close under its 10-week line even in the midst of the recent market turmoil. Shares are about 3% away from the potential entry.
Meanwhile, the RS line — painted in blue on every MarketSmith and IBD daily and weekly chart — sits right at new highs.
Analysts expect quarterly earnings to grow 74% to 59 cents per share on revenue of $496.9 million — 22% year-over-year growth — in the current quarter.
The artificial heart maker reported earnings and sales growth of 106% and 34%, respectively, in the most recent quarter.
A worrisome aspect is the magnitude of the stock’s move since an Oct. 2014 breakout. The current structure is a very late-stage base, which are much more likely to fail than earlier-stage formations.
Earnings are due out May 3 before the market open.
Don’t Ignore The Software Sector
Cybersecurity stocks have quickly become some of the market’s leaders, with the Computer Software-Security industry ranked No. 16 out of 197 groups. Within the group, Proofpoint (PFPT) is ranked No. 3 with a 98 out of highest-possible 99 IBD Composite Rating. The rating is a blend of key fundamental and technical metrics.
Earnings are due out April 26 after the market close.
As the stock market uptrend continues, be on the lookout for which stocks are being added to and removed from IBD’s stock lists to help pinpoint the potential leadership.
Tip: Before making any investment decisions, be sure to check current market conditions, and use IBD Stock Checkup to see if your stock gets passing ratings for the most important fundamental and technical criteria. To get ongoing chart analysis, and alerts to buy and sell signals, check out Leaderboard and SwingTrader.
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