CME Group leads this week's top stocks to watch, while Meta Platforms and Arista Networks also make the cut. So do Paccar and Arch Capital.
CME stock and Arch Capital broke out Friday after rebounding from key technical support. Arista and Paccar topped early entries. Facebook and Instagram parent Meta stock cleared multiple entries.
All these stocks, except CME, can be found on the IBD 50 list of top growth stocks. Meta and ANET stock also belong to the IBD Leaderboard.
Relative Strength Is Key
All have relative strength lines at 52-week highs, signaling strong outperformance vs. the S&P 500. The RS line is the blue line in the charts provided.
Most of these top stocks appear on the MarketSmith RS Line Blue Dot screen, which lists stocks in bases or breaking out with RS lines at new highs. That's an especially bullish quality. The MarketSmith charts will mark such stocks with a blue dot at the end of their RS lines.
Investors should be looking hard for stocks showing relative strength, reclaiming or rebounding from key levels.
The stock market has struggled for some time, but Friday's upside reversal in stronger volume was encouraging.
IBD Live: A New Tool For Daily Stock Market Analysis
CME Stock
Shares of the futures exchange operator rose 2.2% Friday to 211.93, clearing a 209.31 buy point intraday. CME stock surged 5.85% for the week. This top stock reclaimed the 50-day/10-week moving averages, including several gains in above-average volume.
On Oct. 3, CME Group announced an average daily volume (ADV) of 22.7 million contracts in September, the second-highest September ADV on record. Its Q3 ADV of 22.3 million contracts was the second-highest Q3 volume ever.
CME stock screens well in terms of key IBD ratings. It earns an IBD Composite Rating of 92, EPS Rating of 87 and RS Rating of 90, all out of a best-possible 99.
The 90 Relative Strength Rating means that CME stock has outperformed 90% of all stocks in IBD's database over the past 12 months.
Meta Stock
Shares of the Facebook and Instagram owner popped 3.5% to 315.43 on Friday, up 5.1% for the week. Meta stock rebounded from the 50-day and 10-week lines, where it's been trading tightly for several weeks.
On Friday, shares cleared a tiny handle on its cup base, with a 310.94 official buy point, according to a daily MarketSmith chart. Meta stock also topped the mid-September high of 312.87.
The last two earnings reports showed Facebook sales are growing again after a slump, with EPS rebounding in Q2.
Besides the return to growth, investors have cheered Meta CEO Mark Zuckerberg's efforts to shrink his company through big job cuts. An advertising revival has buoyed revenue.
Meta stock carries a Composite Rating of 98, EPS Rating of 86 and RS Rating of 98.
Futures Fall After Hamas Attack On Israel
Arista Stock
Shares of the computer networking provider gained 3.2% to 194.02 on Friday, up 5.5% for the week. Arista stock rebounded from the 50-day/10-week lines.
Arista stock now has a 198.70 buy point from a brand-new flat base. Investors could have used the Oct. 2 high of 189.90 as an early entry for the networking giant.
The RS line for ANET stock is at record highs.
Arista sells computer network switches that speed up communications among racks of computer servers packed into "hyperscale" data centers. Its biggest customers include Meta.
ANET stock is a play on artificial intelligence (AI) investments by tech giants. Amid the rise of "generative" AI, internet data centers will need more computing power and network bandwidth.
For investors in this top technology stock, one issue is whether AI-driven gear orders will re-accelerate sales growth in 2025.
Growth has slowed in recent quarters, but was still brisk in Q2 with a 46% EPS jump and 39% revenue gain.
Arista stock bears a Composite Rating of 98, EPS Rating of 98 and RS Rating of 96.
Paccar Stock
Shares of the big rig maker advanced 1.45% to 87.48 Friday, up 2.89% for the week. Paccar stock rallied further above the 50-day/10-week lines, where it has been trading tightly.
PCAR stock eyes a 90.05 buy point from a flat base. However, a move above Thursday's high pushed shares above the bulk of trading since the base began to form in July. That offered an early entry.
On top of that, the RS line for Paccar stock also boasts a blue dot as it hits highs.
Paccar subsidiaries include DAF, Kenworth, Peterbilt and Leyland. Through those subsidiaries, Paccar produces light-, medium- and heavy-duty semi-trucks that are sold worldwide.
It has seen Tesla emerge as a new rival after the Tesla Semi truck rolled out. Bracing for competition, Paccar says it has invested in battery electric technology as well as hydrogen internal combustion and fuel cell powertrains.
The growth of e-commerce deliveries and logistics networks has boosted demand for long-haul trucks.
Paccar stock carries a Composite Rating of 98, EPS Rating of 92 and RS Rating of 93.
Arch Capital Stock
Shares of the property and casualty insurer rose 0.66% to 82.18 Friday, up 3.1% for the week. Arch Capital stock found support at the 50-day/10-week lines on Tuesday.
Arch stock closed right on an 82.18 buy point from a cup-with-handle base. Volume was light Friday but was decent in the prior two sessions.
Arch Capital is benefiting from strong demand for insurance and its healthy reinsurance pricing. A JMP Securities analyst said Arch Capital "stands to be one of the biggest beneficiaries of a hardening P&C (property and casualty) pricing cycle, given its depth and breadth of global distribution and underwriting expertise."
Arch Capital stock bears a best-possible Composite Rating of 99, EPS Rating of 97 and RS Rating of 94.
