Fast-Track Your Investments: 5 Stocks Breaking New Ground

Here are 5 market-leading stocks for this week that are at their buying points. Dive right in!

The market is bustling, and it’s brimming with opportunities. Have the S&P500 and NASDAQ caught your attention lately? They’re standing strong, sailing above all major moving averages despite the latest dips. In this post, we’re unpacking a list of top-tier stocks that are ready to pop. Ready to find out which stocks are ripe for the picking and how to strategically make your moves? Stay tuned!

The Current State of Play in the Market

Let’s face it, staying on top of the S&P500 and NASDAQ indexes is no small feat, especially when they’re performing somersaults above their key moving averages. But what’s the real story behind these numbers? I’ve dissected the latest trends to show you exactly where the opportunities lie. And the best part? It looks like the stage is set for some serious action. Curious about what this means for your portfolio? Keep reading!

Why These Stock Picks?

This week, I had to really dig deep to unearth stocks not just holding their own but setting the stage to potentially lead their sectors. It wasn’t easy given the volatility, but who doesn’t love a challenge? What I found might surprise you. These stocks are somewhat isolated in their performance, not necessarily front runners in the hottest sectors. And why does this isolation matter? Because it often preludes to them making a major leap forward. Wondering which stocks are on this exclusive list? Let’s dive into that next.

Stocks to Watch Closely

Toll Brothers (TOL)

• Sitting pretty with a solid foundation for growth.
• What’s not to love about a potential market leader gearing up during uncertain times?

Archrock (AROC)

• Quietly climbing, this could be the dark horse that pays off big.
• Have you ever rooted for the underdog? Now might be a good time to start.

PulteGroup (PHM)

• Shallow base depth indicates less market resistance.
• This stock could signal a quick rebound despite lower industry rankings.

Dorian LPG (LPG)

• With strong fundamentals and rapid earnings growth, it fits the CAN SLIM criteria.
• Positioned in the buy zone, suggesting an optimal buying opportunity.

Palomar Holdings (PLMR)

• Solid company profile aligning with CAN SLIM criteria.
• Positive market response to recent earnings, placing it firmly in the buy zone.

Key Selection Criteria

What makes a stock worth your time and money? I look for a few key traits that signal a stock is more than just a flash in the pan:

• Industry leaders or those poised to take the lead.
• Solid up/down ratios signaling more ups than downs.
• Strong institutional support. Does the smart money believe in these stocks? Absolutely.

And what’s coming up next? We’ll break down these criteria into bite-sized details that you can use right away.

At a Glance: The Nitty-Gritty Details

Archrock (AROC)

• Next EPS Date: NA
• Industry Rank: 54/197
• Stage: 1
• Base Type: Flat base
• Base Depth: 12%
• Up/Down Ratio: 1.6
• EPS Trend: Up
• RS Rating: 95
• RS Trend: Up
• Institutional Ownership Trend: Up
• Pros:
  1. Key metrics such as RS trend, institutional ownership trend, and EPS trend are positive, enhancing confidence in this investment.
  2. Current price is within a flat base, above key moving averages, making it a safer buying opportunity with a stop-loss set below these averages.
  3. Recent earnings were favorable with no upcoming earnings, reducing immediate risk.
• Cons:
  1. Industry rank is 38 out of 197, indicating potential for improvement.
• Comments: The stock does not fully meet CAN SLIM criteria due to slightly lower earnings growth (below 20%). Otherwise, the setup is solid.
• Maximum Position Size: 10%
• Maximum Favorable Buying Price: $20.59
• Stop-Loss: $19.34
• Profit Target: $24.34
• Position Risk: 6.07%

PulteGroup (PHM)

• Next EPS Date: NA
• Industry Rank: 39/197
• Stage: 3
• Base Type: Cup with handle
• Base Depth: 14%
• Up/Down Ratio: 1.3
• EPS Trend: Neutral
• RS Rating: 91
• RS Trend: Up
• Institutional Ownership Trend: Up
• Pros:
  1. Shallow base depth (14%) is a strong bullish indicator.
• Cons:
  1. Low industry rank (78/197) suggests the company is a potential outlier in its sector.
  2. The base is in its third stage, potentially signaling imminent institutional selling.
  3. Last earnings report showed a decline.
• Comments: This stock does not align with CAN SLIM due to inadequate earnings and sales growth.
• Maximum Position Size: 5%
• Maximum Favorable Buying Price: $121.18
• Stop-Loss: $115.12
• Profit Target: $139.36
• Position Risk: 5.00%

Toll Brothers (TOL)

• Next EPS Date: 21 May
• Industry Rank: 39/197
• Stage: 3
• Base Type: Cup with handle
• Base Depth: 15%
• Up/Down Ratio: 1.2
• EPS Trend: Neutral
• RS Rating: 95
• RS Trend: Up
• Institutional Ownership Trend: Up
• Pros:
  1. High RS rating and an upward trend since December 2023.
  2. Shallow cup with handle base (15%) indicates minimal selling pressure.
  3. ROE of 21% demonstrates profitability.
  4. Stock is currently in a buy zone after a high-volume breakout.
• Cons:
  1. Impending earnings release adds risk to immediate buying.
  2. High stage of price base suggests a mature and obvious uptrend.
  3. Slower EPS growth and recent sales growth of only 9% do not meet CAN SLIM criteria.
• Comments: This stock does not align with CAN SLIM standards despite correct base performance.
• Maximum Position Size: 10%
• Maximum Favorable Buying Price: $132.33
• Stop-Loss: $121.83
• Profit Target: $163.83
• Position Risk: 7.93%

Dorian LPG (LPG)

• Next EPS Date: 22 May
• Industry Rank: 36/197
• Stage: 6
• Base Type: Cup with handle
• Base Depth: 33%
• Up/Down Ratio: 1.4
• EPS Trend: Up
• RS Rating: 94
• RS Trend: Up
• Institutional Ownership Trend: Up
• Pros:
  1. High RS rating and upward trend indicate strong market performance.
  2. Solid fundamentals with rapid growth in earnings and sales meeting CAN SLIM criteria.
  3. Currently in a buy zone.
• Cons:
  1. Upcoming earnings introduce buying risk.
  2. Long-standing price trend since May 2022 suggests market awareness and potential saturation.
  3. Desirable higher industry rank.
• Comments: This is a CAN SLIM-compliant stock currently positioned favorably for buying.
• Maximum Position Size: 10%
• Maximum Favorable Buying Price: $44.22
• Stop-Loss: $41.01
• Profit Target: $53.85
• Position Risk: 7.26%

Palomar Holdings (PLMR)

• Next EPS Date: NA
• Industry Rank: 29/197
• Stage: 2
• Base Type: Flat base
• Base Depth: 14%
• Up/Down Ratio: 1.1
• EPS Trend: Up
• RS Rating: 93
• RS Trend: Up
• Institutional Ownership Trend: Up
• Pros:
  1. Strong company profile and alignment with CAN SLIM criteria.
  2. Positive market response to recent earnings.
  3. Favorable buying position within current market conditions.
• Cons:
  1. Higher industry ranking would be preferable.
• Comments: A prime candidate for investment, meeting CAN SLIM requirements.
• Maximum Position Size: 10%
• Maximum Favorable Buying Price: $88.00
• Stop-Loss: $81.27
• Profit Target: $108.19
• Position Risk: 7.65%

Simplifying the Jargon

Confused by all the stock market gibberish? Not anymore! Here’s a quick rundown:

• EMA 21 Calculates the 21-period exponential moving average, highlighting short-term trends.
• SMA 50 Averages the price over 50 periods, showing medium-term trends without overemphasizing recent data.
• SMA 200 Averages the price over 200 periods, revealing long-term trends by treating all data equally.
• Pivot price is the optimal buy point of a stock is defined as the moment it transitions from a stable basing area or chart pattern and begins to achieve new highs in price.
• Industry Rank Investor’s Business Daily’s system that ranks industries 1 to 197 based on performance. It guides us in CAN SLIM TRADING towards leading sectors.
• U/D Ratio Measures stocks closing up versus down. A ratio above 1.0 indicates bullish sentiment, important in CAN SLIM TRADING.
• RS Rating Ranks a stock’s performance on a 1 to 99 scale. I look for at least 85, showing strong momentum and growth potential.
• RS Line Compares stock price to the market, plotted as a ratio. We seek an uptrend, indicating outperformance and strong momentum.
• Volatility Measures how much a security’s price fluctuates over time. High volatility means large price changes, indicating risk and potential reward.
• Institutional Ownership Trend indicates whether the stock is under accumulation or distribution by the institutions.
• EPS (Earnings Per Share): A financial metric calculated by dividing a company’s net profit by the number of its outstanding shares. It indicates the amount of profit attributed to each share of stock, serving as a key indicator of a company’s profitability.

And finally, how do you use this info to make smarter investment choices? That’s what we’re tackling next.

Stage 1: Basing or Bottoming Stage

Definition: A period following a stock’s decline where it starts moving sideways, forming a base. This stage signifies the easing of downward pressure and the beginning of stabilization, indicating that the stock is not in an uptrend yet but is preparing for potential future growth.

Stage 2: Advancing or Uptrend Stage

Definition: The phase in which a stock breaks out of its base on significant volume, indicating a strong buying interest and the initiation of a new uptrend. This stage is considered the most opportune time for investors to purchase the stock, as it is expected to achieve substantial gains.

Stage 3: Top or Peaking Stage

Definition: A stage characterized by the stock beginning to exhibit signs of losing momentum after its upward movement. The stock may start to move sideways with increased volatility compared to Stage 1. This suggests the stock might be reaching its peak, and the existing uptrend could be weakening.

Stage 4: Declining or Downtrend Stage

Definition: This final stage occurs when the stock breaks down from its Stage 3 pattern and enters into a downtrend, marked by a sequence of lower lows and lower highs. It signifies that selling pressure has surpassed buying interest, usually serving as a signal for investors to sell the stock to mitigate further losses.

Ready to Make Your Move?

Now that you’re equipped with the insights and specifics on some promising stocks, what’s your strategy? Will you wait for the perfect moment or jump at the first sign of a breakout? Remember, in the stock market, timing is everything—but so is bold action. So, why not set those plans in motion and maybe, just maybe, this will be the decision that defines your year. Happy investing, and here’s to hoping your next big stock pick is a grand slam!

One more thing: if you have any thoughts or questions, fill out the form here and I’ll get back to you.