Tuesday's ideas come from IBD's MarketSurge Blue Dot screen, which combines the relative strength line with MarketSurge pattern recognition. When a stock's RS line hits a new high while the stock is forming a base or breaking out, the Blue Dot appears on the MarketSurge daily or weekly chart.
Garmin Stock Above Add-On Entry
Garmin stock is bypassing an add-on entry following an Oct. 30 breakout move above a 184.42 flat-base entry. At that time, the maker of devices for outdoor recreation, fitness and navigation handily beat analyst estimates for the third quarter and raised its outlook for the full year.
During that breakout, the RS line hit a new high, triggering the blue dot on the MarketSurge chart.
Shares are just above a 215.55 buy point in a three-weeks-tight pattern. The buy zone runs up to 222.02.
Keep in mind that tight areas are typically used as add-on points for existing positions since the stock is extended from its previous base and its moving average lines.
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Ollie's Stages Breakaway Gap
Ollie's Bargain Outlet is breaking out past a 104.98 buy point with a breakaway gap Tuesday. During a breakaway gap, investors can use the high price of the first five-minute bar as a reasonable entry. For Ollie's, that places the buy point at 110.23.
The RS line notched a new high Tuesday.
Early Tuesday, Ollie's posted third-quarter adjusted earnings per share of 58 cents, up 14% from a year ago and a penny ahead of estimates. Sales rose 7.8% to $517.4 million, shy of $519.5 million estimates. Same-store sales, which rose 7% in the year-ago quarter, slipped 0.5% from a year ago vs. flat expectations, according to FactSet.
"We delivered strong earnings on higher sales, gross margin, and disciplined expense control," CEO John Swygert said in the earnings release. He noted that Ollie's "took advantage of a number of real estate opportunities that strengthened our new store pipeline and enhanced our competitive positioning."
Other Best Stocks To Watch: Alpha & Omega, Grail
Alpha & Omega Semiconductor declined more than 2% Tuesday afternoon and is holding above a 47.45 buy point in a choppy base that goes back to mid-July. Last week, the stock broke out past the entry and the RS line hit a new high on the weekly chart.
The base also has elements of a double bottom, which would have placed the correct entry at 43.87.
Finally, Grail, a new issue, is attempting a breakout past a cup base's 21.47 buy point, per IBD MarketSurge chart analysis. The RS line hit a new high during last week's breakout move. Shares fell 5% Tuesday afternoon, but so far there's no sell signal.
Grail is a biotechnology company that focuses on developing technologies for the early detection of cancer.
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on AI stocks, other best stocks to buy and watch and the Dow Jones Industrial Average.
