S&P 500 giants Amazon.com (AMZN), Netflix (NFLX) and ServiceNow (NOW) are part of an elite club. Along with Carvana (CVNA) and Manhattan Associates (MANH), they boasted a “blue dot” at the end of their relative strength lines in MarketSmith charts at Monday’s close.
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Why does that matter? The relative strength line tracks a stock’s performance vs. the S&P 500 index. It’s an easy way to see if a stock is a true leader in good markets or bad. But stocks with strong RS lines often are extended.
The RS line blue dot, on either a daily or weekly chart, marks stocks that are still in bases, or just breaking out, but with the RS line at 52-week highs. So it’s an excellent way to find leading stocks that are actionable or setting up.
Amazon stock is actionable, along with ServiceNow.
NOW stock is on the IBD Leaderboard watchlist. Amazon and NFLX stock are on SwingTrader. ServiceNow and MANH stock are on the IBD 50.
Amazon Stock
Amazon stock popped 3.5% to 143.10 on Monday, a 52-week closing high. Shares finished just shy of a 143.63 flat-base buy point. Monday’s move pushed AMZN stock above a handle-like early entry at 139.96.
Amazon has rallied in part on artificial intelligence hopes, as well as a recently announced expanded partnership with Shopify (SHOP).
Netflix Stock
NFLX stock edged up 0.6% to 445.36. Shares are working on a 485 consolidation buy point. It’s possible that Netflix stock is working on a tiny handle. Investors could use last week’s high of 453.45.
ServiceNow Stock
NOW stock rose 4.8% to 590.88 last week, rebounding from its 50-day and 10-week lines. The S&P 500 leader still actionable from those levels. ServiceNow stock also is closing in on a 614.36 buy point from a shallow cup base.
ServiceNow is enjoying an AI-related boost, along with many other software names.
Carvana Stock
Carvana jumped 8.2% to 50.81. Volume was light for the online car dealership, as it’s been for the past several weeks. Carvana has a 52.62 cup-with-handle buy point.
Manhattan Stock
MANH stock climbed 1.3% to 203, close to a 205.70 buy point from a shallow cup-with-handle base. The supply-chain management software maker briefly broke out on Friday.
Manhattan Associates was Friday’s IBD Stock Of The Day.
The company has shifted to the cloud, and is touting generative AI offerings.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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