Google-parent Alphabet leads this week's list of stocks to watch as Google stock is in a buy zone. EV-related plays and IBD 50 list members Allison Transmission and Li Auto also are on the list. So is oil services giant SLB along with payments processor Mastercard.
The market is in correction as a rally attempt faltered late last week with the indexes hitting resistance at their 50-day moving averages. Investors should be cautious about making new buys.
But, at the very least, investors should be paying close attention to stocks near buy points, holding key support and showing relative strength.
Google Stock
Tech titan Alphabet is a member of the IBD Big Cap 20 list. Google stock advanced 47% this year despite rising artificial intelligence and internet search competition. Earnings rose 19% to $1.44 per share for its Q2 results in late July, ending a four-quarter streak of year-over-year declines.
Google stock is trading in a buy zone for a cup-with-handle base. The buy zone stretches 5% beyond a given buy point. Shares broke out on July 26 after climbing above the 127.10 buy point.
Investors could wait to see if GOOGL can clear its mini-consolidation from the past few weeks.
Google hit a 52-week high of 134.25 on Thursday morning then fell to 127.25 on Friday before ending the week up 1.9% to 129.88.
Google stock ranks second in terms of group leadership for the Internet-Content Group according to the IBD Stock Checkup. It trails Facebook parent Meta Platforms.
GOOGL has a 98 Composite Rating out of a best-possible 99. The Composite Rating combines various technical indicators into one easy-to-read score. Alphabet has a 90 EPS Rating. The stock's relative strength line is off recent highs and it has a 90 RS Rating.
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Mastercard Stock
Payments giant Mastercard is holding up even as retailers caution of slowing consumer spending. Spikes in transaction volume and cross-border payments from the travel rebound fueled earnings beats for both Mastercard and Visa the past four quarters.
Elsewhere, Mastercard ended its cryptocurrency card partnership with the Binance exchange, Decrypt reported Friday. Mastercard plans to wind down its four pilot programs in Argentina, Brazil, Colombia and Bahrain for a Sept. 22 deadline. The card company announced the partnership with Binance last year, while Visa ended its Binance partnership last month.
MA stock has a new flat base with a 405.19 buy point. That flat base forged largely in the buy zone of a prior flat base with a 392.20 buy point.
Mastercard rose 2.7% to 402.89 for the week.
MA stock has an 88 Composite Rating and an 86 EPS Rating. Mastercard's relative strength line is trending higher since late July and it has an 84 RS Rating.
ALSN Stock
Allison Transmission was the IBD Stock Of The Day for Thursday. The Indianapolis-based company manufactures transmissions and drivetrain components for commercial, electric and defense vehicles. Allison is maneuvering further into the EV space via acquisitions and partnerships with the likes of Nikola.
ALSN stock is in an extended tight pattern with a 60.17 buy point. The pattern could mature into a flat base, but needs another week or so.
Shares rose 0.1% to 58.68 last week.
The stock's relative strength line is hovering near 52-week highs after a strong run-up that started in May. Shares found support at their 21-day exponential moving average while its 50-day and 10-week lines catch up to that level.
Allison stock rallied more than 40% this year and hit a record high of 60.17 on July 28 following its Q2 beat-and-raise report. ALSN shares have a near-perfect 97 Composite Rating and an 88 EPS Rating. The stock has a 94 RS Rating.
SLB Stock
SLB, formerly known as Schlumberger, barreled above a buy point in early August as oil prices climbed to their highest prices since last year. West Texas Intermediate crude oil futures pulled back slightly the past two weeks and are hovering around their September 2022 levels.
The oil field service giant is a member of the IBD Big Cap 20 list.
SLB stock fell 2.7% to 56.46 last week, nearing its 10-week line as crude oil backed off.
SLB is trading below the 58.70 buy point for a cup-with-handle base after pushing above the entry on Aug. 9. Investors could opt to focus on 60.12 as a new handle buy point. But that would offer an early entry around the old 58.70 mark.
SLB stock has a perfect Composite Rating and an 89 EPS Rating. The relative strength line dipped from its mid-August highs with a 91 RS Rating.
LI Stock
LI Auto leads the Auto Manufacturers Group according to IBD Stock Checkup. The Chinese EV maker trounced Q2 earnings estimates at the beginning of the month as deliveries ramp up.
Li expects to deliver 100,000 to 103,000 hybrid SUVs in Q3, improving from the 86,533 EVs in Q2. The company already reported 34,134 deliveries in July. Li will report August deliveries on Friday, Sept. 1.
Production bottlenecks are limiting further delivery growth, but that should end soon as a new Beijing plant comes on line. That plant will also build a minivan, Li's first all-electric vehicle, with the Mega MPV starting deliveries in early 2024.
After more than doubling from late April to early August, LI stock has retreated to find support along its 50-day line. A bullish bounce above its 21-day moving average could offer an entry. Shares may be working on forming a base.
Li Auto rose 1.1% on Friday and for the week to 39.26.
LI stock has a perfect 99 Composite Rating and an 81 EPS Rating. The shares' relative strength line is off early August highs but still has a near-perfect 97 RS Rating.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
