Energy giant Exxon Mobil, health care stocks Humana and Merck, defense stock General Dynamics and lumber producer Weyerhaeuser are five stocks to watch near buy points.
Why these five stocks? All are from strong sectors of the market. And all five have recently reported quarterly results. That's a big headline risk that's out of the way.
Merck stock is on SwingTrader.
Exxon Stock
The oil giant reported mixed first-quarter earnings Friday as crude oil prices stabilize above $100.
Oil prices have soared since the Russian invasion of Ukraine, and the West turned away from Russian supply. While analysts had predicted that the price of a barrel of oil would skyrocket to $200, Covid lockdowns in China, the biggest importer of crude oil, have slowed demand. As a result, suppliers are better able to meet demand.
Exxon's earnings per share jumped 218% to $2.07 a share, but that was below estimates for $2.23. Revenue jumped 53% to $90.5 billion, topping views for $82.84 billion.
Q1 EPS excludes $3.4 billion, or 79 cents per share, related to Exxon's planned exit from the Russia Sakhalin-1 project as a result of the Ukraine war.
Exxon increased its XOM stock buyback program to as much as $30 billion through 2023, from a previously planned $10 billion.
Shares fell 2.5% to 85.02 in Friday's stock market trading. Exxon stock edged lower for the week, but rebounded from a Monday tumble below its rising 50-day moving average. A strong weekly gain in crude oil prices helped buoy XOM and other oil stocks.
XOM stock has a cup-with-handle buy point of 89.90, according to MarketSmith. That follows a strong uptrend.
Exxon's relative strength line is trending higher to near 2019 levels. The RS line, the blue line in the charts provided, tracks a stock's performance vs. the S&P 500 index. Its RS Rating is 96 out of a best-possible 99, while its EPS Rating is 73.
General Dynamics Stock
The maker of the Gulfstream line of jets on Tuesday posted Q1 EPS of $2.61, a 3.1% rise vs. a year ago and beating Wall Street analysts' consensus of $2.51.
GD's revenue of $9.4 billion also beat estimates of $9 billion. Its aerospace business had a strong quarter. It had revenue of $1.9 billion and operating earnings of $243 million with a 12.8% operating margin.
"Revenue was almost $180 million higher than anticipated by the sell side," CEO Phebe Novakovic said. "The difference is almost entirely growth at Gulfstream services and jet aviation."
The U.S. market remains robust with some slight improvement in Southeast Asia and the Middle East, Novakovic said. But China remains slow.
"The Russian invasion of Ukraine has stopped activity in Eastern Europe and slowed activity in Western Europe," she added.
The pandemic fueled demand for private air travel, especially among wealthy and business travelers.
Meanwhile, Russia's invasion is spurring Europe and other countries to significantly increase defense spending.
General Dynamics and other defense stocks jumped at the start of Russia's Ukraine invasion and have now formed short bases above longer consolidations.
GD stock fell about 1% to 236.53 last week, closing a fraction below its 50-day line. General Dynamics stock has a flat-base buy point of 255.09. But it offers an early entry just above recent highs, at 249.79, which would also be a closing high. It also wouldn't be too high from the 50-day/10-week line.
GD's RS line is near highs. Its RS Rating is 93, while its EPS Rating is 61.
Humana Stock
Humana earnings rose 5% vs. a year earlier, easily beating first-quarter views on Wednesday. Revenue climbed 16% to $24 billion.
Membership growth and higher premiums fueled the strong results.
For the full year, Humana still expects individual Medicare Advantage membership to grow by 150,000 to 200,000 members. However, it expects Group Medicare Advantage membership to remain flat year over year.
HUM stock tanked a couple months ago due to its Medicare Advantage enrollment warning. But shares are near a handle buy point of 469.44. Still, HUM stock lags its health insurer peers like UnitedHealth and Anthem.
Merck Stock
Merck stock surged on April 28, after the drug giant beat Q1 estimates, thanks in large part to more than $3 billion in sales of its Covid treatment, Lagevrio.
In Q1, Merck earnings per share soared 84% while revenue leapt 50% to $15.9 billion.
MRK stock has an official cup-with-handle buy point of 89.58, as its RS Rating hits a new high of 90. Shares briefly topped that on Friday before pulling back. But Merck stock is already actionable from breaking the trendline of the handle on Thursday. The stock rose 4.9% to 88.71 for the week.
Weyerhaeuser Stock
The Seattle, Wash.-based company is one of the world's largest private owners of timberlands. It owns or controls around 11 million acres of timberlands in the U.S., and manages additional timberlands under long-term licenses in Canada.
Weyerhaeuser is the world's largest producer of softwood lumber and market pulp. The company also produces fine paper, containerboard, bleached paperboard and a variety of wood products.
Weyerhaeuser is also involved in real estate development and construction, specifically single-family housing, residential lots and master-planned communities.
It has posted seven straight quarters of earnings and revenue growth, thanks to the hot building market over the last two years. On Friday, the company reported EPS of $1.31, 44% above last year's quarter, on a 24% increase in sales to $3.112 billion.
WY stock is chasing a cup-with-handle buy point of 42.73 on a daily chart. On Friday following earnings, shares hit 42.86 before pulling back, closing down 1.6% to 41.22.
WY stock's relative strength line has been hitting 52-week highs for a few weeks.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
