One of the first characteristics of winning stocks is that they outperform the S&P 500. But you cannot tell whether a stock is doing better than the index just going by its price. How do you identify these outperformers?
A simple IBD chart tool is all it takes to track a stock's relative performance. The relative strength line shows how a stock is doing compared with the S&P 500. When the line hits a new high as a stock nears a buy point in a base, chances of further gains are strong. IBD MarketSurge's blue dot screen identifies precisely those stocks.
Today, three stocks are near buy points as their relative strength lines touch new highs.
Costco is in a buy zone from a buy point of 896.67. Shares are moving right along the 21-day exponential moving average as the stock does the right thing, holding recent gains.
August-quarter earnings are due on Thursday. Analysts see profit rising 10% in the current fiscal year and the next one. Costco ranks first in the major discount chains industry group.
Netflix Stock Above Buy Point
Netflix also is holding gains after breaking out at 697.49. Shares are in a buy zone to 732.36. The leading stock in the movies and related businesses group has a near ideal EPS Rating of 98.
The content streaming giant will report third-quarter results on Oct. 17. Rising profit estimates for 2024 support the stock's fundamental outlook.
In the restaurants group, Sweetgreen appears to be building a cup base with a buy point at 38.53. The Mediterranean-themed chain went public on the New York Stock Exchange in November 2021 at 28 a share. Today, it trades around 36 but has jumped nearly 500% from its all-time low in March 2023.
Sales growth has been steady, although the company has been realizing quarterly losses. But its Relative Strength Rating of 99 is ideal, and the up/down volume ratio of 1.5 adds strength to its chart.
Please follow VRamakrishnan on X/Twitter for more news on the stock market today.
