Amazon stock, Carvana, Uber Technologies and General Electric are among the best stocks to watch in today's stock market. All four boast relative strength lines at new highs.
The RS Line Blue Dot list — a premium IBD MarketSmith feature — identifies stocks whose relative strength lines are hitting new highs while the stock is building a new base or breaking out past a new buy point.
That's a bullish combination and a prime way to spot new market leaders.
The RS line measures a stock's price performance vs. the S&P 500 and is the blue line on every IBD chart. If the market's down, good stocks will outperform by treading water. When the market rebounds, the stocks with best relative strength should bounce back even stronger than the market.
Current market leaders on the RS Line Blue Dot list include Amazon.com, Carvana, Uber and General Electric.
The RS Line Blue Dot list is part of the MarketSmith Pattern Recognition add-on, which traces bullish chart formations and identifies buy points.
Amazon Stock Nears Buy Point
Amazon stock is approaching a 143.63 buy point in a flat base. Shares are in a new buy area, as they rebound from their 50-day line and move above a trendline entry just below 140. The IBD SwingTrader stock dropped 0.4% midday Tuesday.
In late August, Amazon announced a distribution deal with Shopify. While there's some overlap in online merchants that use Amazon or Shopify, Amazon stands to gain new customers.
The company now offers its massive distribution network to merchants that do not sell goods on its website. The product fulfillment services are part of a program called Buy With Prime.
Further, it announced it will release an app giving Shopify's U.S. merchants access to the Amazon Buy with Prime service. On Tuesday, Amazon announced a pact with Occidental Petroleum to cut carbon emissions.
Carvana, Uber
Carvana is attempting to break out past its latest buy point, while Uber exceeded an early entry.
Online car dealership Carvana surged more than 8% Monday, as it paved a cup with handle that displays a 52.62 buy point. Shares pared gains to 1.6% midday Tuesday, after they attempted to break out past the buy trigger earlier in the session.
Carvana is one of the year's best stocks, up 971% year to date through Monday's close.
Meanwhile, Uber Technologies is rebounding nicely after pulling back to its 50-day line. Uber stock was just 2% away from a flat base's 49.49 buy point as it inched higher Tuesday at midday. On Monday, Uber shares jumped above an early entry at 47.70.
The ride-share pioneer has expanded into Uber Eats, Uber Freight and beyond.
GE Stock Breaks Out
General Electric is breaking out past an early entry at 115.85, as it bounces off its 50-day line. Meanwhile, a regular entry in a flat base looms at 117.96. GE stock rose 1% Tuesday afternoon.
On July 25, the industrial leader delivered a quarterly beat-and-raise report, with gains or improvements across its aerospace, gas power and renewable energy segments.
The aerospace segment — sometimes called GE's "crown jewel" — makes jet engines and aviation systems for plane makers including Boeing. GE Aerospace also runs a lucrative aftermarket business for engine repair and maintenance.
General Electric has averaged 40% earnings growth over the past four quarters. Sales growth accelerated from 3% to 7%, 14% and 18%, making it look more like a growth stock.
Be sure to follow Scott Lehtonen on X/Twitter at @IBD_SLehtonen for more on Amazon stock and the Dow Jones Industrial Average.
