Apple and Hilton Worldwide lead this weekend's watch list of five stocks near buy points that all share a bullish feature — at least relative to the broad market.
Their relative strength lines, the blue line in the charts provided that track their progress vs. the S&P 500, are all breaking out to 52-week highs. RS lines hitting new highs before the stock breaks out is an especially positive signal. In addition to AAPL stock and HLT, Union Pacific, Commercial Metals and Oneok also are worth a look.
All of these stocks also have strong IBD Composite Ratings of at least 93 out of a possible 99. The single rating combines both technical and fundamental factors. Investors should focus on stocks with a Composite Rating of at least 90. You can check out any stock's Composite Rating and how it ranks relative to others in their industry group at IBD Stock Checkup.
CMC stock is part of the flagship IBD 50 stock list, while OKE stock is on the IBD Big Cap 20 list.
Amid an earnings season that has seen numerous stocks dive on yellow flags in the outlook, it's an advantage that three of the five have already reported. Oneok results are due Feb. 28. Commercial Metals report for the quarter ending January on March 17.
Keep in mind that the market backdrop isn't too welcoming right now. Be sure to read IBD's daily afternoon The Big Picture column to get the latest analysis of the market's prevailing trend and what it means for your trading decisions.
AAPL Stock
Apple easily beat Q4 estimates, despite supply constraints that worsened during the quarter, meaning supply couldn't keep up with demand. That included 9% growth in product revenue to $104.4 billion amid positive response to the iPhone 13 and 24% growth in services revenue to $19.5 billion. Sales in China grew 21% in the quarter.
As supply constraints ease, Apple should see continued momentum. The company also may reportedly unveil a new lost-cost iPhone and updated iPad in March.
AAPL stock has slipped just below its 50-day moving average and is now 8.5% below its Jan. 4 all-time high. Still, it's trading within about 5% of a 176.75 buy point from a 7-week cup-with-handle base, according to a MarketSmith analysis.
HLT Stock
Hilton posted Q4 results on Wednesday, with its 72-cent EPS just missing estimates, despite reversing a year-ago loss. Omicron slowed the travel recovery in December, then worsened in January. But management cited notable improvement by month's end.
Hilton said it achieved 5.6% net room growth in 2021, a testament to the attractiveness of its brands, given franchise growth. It sees another 5% growth in the coming year.
Since the pandemic, Hilton also has learned to operate more efficiently, with margins up 500 basis points above peak 2019 levels in 2021.
HLT stock touched a new high, but closed off 1% after its earnings report and closed the week right at its 21-day moving average. HLT stock is about 6% below a 159.31 buy point from a six-week cup base.
Several hotel operators are delivering surging earnings, with their stocks at or near buy points, as part of a broader travel boom.
UNP Stock
UNP stock, Thursday's IBD Stock Of The Day, stands to benefit as port congestion eases and improved chip availability allows for higher production among automakers, a premium customer.
Still, earnings are chugging along thanks to efficiency gains and customer wins, including Knight-Swift Transportation Holdings, which shifted its intermodal business — deliveries requiring both truck and rail — to Union Pacific at the start of the year.
"With a strong overall demand environment and our disciplined pricing approach, we expect to yield pricing dollars in excess of inflation dollars," said CFO Jennifer Hamann said on the Jan. 20 earnings call.
UNP stock came to a stop on Friday about 2% below a 256.21 buy point from a six-week flat base. The base is just 8% deep, extremely shallow given the market sell-off.
CMC Stock
CMC stock was Friday's IBD Stock Of The Day amid a strong demand outlook. Nucor and other steelmakers also have rallied recently, even as steel prices continue to descend from peaks hit last summer.
Commercial Metals is building its third and fourth micro mills, which it says produce steel with higher strength and at lower cost than mini mills. The third mill, in Arizona, will replace a much higher-cost facility in California that it will sell to pay half the construction costs. Both new micro mills should be online in time to benefit from peak spending from the $1.2-trillion infrastructure bill approved last year.
CMC stock is about 5% below a 38.82 buy point from a seven-week consolidation. Shares could start to work on a handle that would offer a slightly lower entry. Investors could use Wednesday's high of 37.49 + 10 cents as an early entry already.
OKE Stock
Oneok is a midstream provider of pipeline, storage and processing services of natural gas and natural gas liquids, such as ethane. Oneok also boasts among the highest S&P 500 dividend yields, topping 6%.
In November, Oneok said it will complete previously announced natural gas and natural gas liquids infrastructure projects that had been set aside, boosting capacity at a relatively low cost and generating attractive returns.
While natural gas prices are on the rise ahead of a possible Russian invasion of Ukraine, OKE stock isn't a play on deteriorating geopolitics. Actually, OKE stock slipped 4.2% over the past week.
OKE stock closed at 61.81 on Friday, about 5% below a 64.90 cup-with-handle buy point after a 17-week consolidation.
