Spotify, DoorDash, MercadoLibre, Palo Alto Networks and PDD Holdings are on this week's list of stocks to watch to kick off 2024.
All of the featured stocks are finding support around their 21-day exponential moving averages. That follows recent rallies to or nearing the 20%-25% profit-taking zone. Stocks will often pause around those levels, which has given their other moving averages some time to close the gap.
A strong move off their 21-day lines might offer opportunities for add-on buy points or possibly new entries given the strength of the currently bull market. A longer pause or gradual pullback would let these names forge new proper bases, with the 50-day lines catching up.
With the exception of Spotify, all of this week's stocks rank among those on the IBD Tech Leaders list.
Spotify
Spotify has fallen just below its 21-day line, retreating gradually over the past three weeks after hitting the profit-taking zone. A move above the Dec. 28 high of 192.44 could offer an early entry opportunity. Also, the 50-day/10-week lines are rapidly closing the gap.
SPOT stock is wrapping up 2023 with a nearly 30% rally from its late-October lows after reporting a surprise profit for its Q3 results. The music and podcast streaming platform reported earnings of 36 cents per share, compared to Wall Street forecasts of a loss of 24 cents per share.
Spotify's monthly active users increased 26% year over year to 574 million, edging out expectations of 572 million. In addition, the company's sales growth accelerated the past four quarters.
Spotify was the IBD Stock Of The Day for Wednesday and ranks fifth in the Computer Software-Education/Media Group according to the IBD Stock Checkup.
SPOT stock has an 80 Composite Rating out of a best-possible 99. The Composite Rating combines various technical indicators into one easy-to-read score. Spotify's relative strength line has faded from early December highs but still has a 95 RS Rating.
DoorDash
DoorDash was the IBD Stock of The Day for Thursday and is a member of the IBD 50 list of premier growth stocks.
DASH stock jumped about 16% from a double-bottom breakout and reported better-than-expected earnings in early November. The mobile order and delivery provider reported a loss of 19 cents per share on $2.2 billion in revenue, coming in well above FactSet expectations of a 40-cents per share loss on $2.09 billion in sales.
Dash is right on its 21-day line to end 2023.
In 2023 DASH stock surged 103% and is trading at its highest level since April 2022. But shares are still well below their November 2021 record of 257.21.
DoorDash has a muscular 89 Composite Rating and its relative strength line is near 52-week highs with a 94 RS Rating.
MercadoLibre
MercadoLibre spiked 86% in 2023 as the Latin America e-commerce giant posted triple-digit earnings growth the past four quarters.
MELI stock is trading along its 21-day line, consolidating just below a profit-taking zone after breaking out from a cup-with-handle base in mid-November.
MercadoLibre now has a three-weeks-tight pattern with a 1,653.42 buy point. Shares could form a flat base by the end of next week with a 1,660 buy point. A move back above 1,600 would offer an early entry.
MELI is a member of the IBD 50 list, Big Cap 20 list and leads the Retail-Internet Group, according to the IBD Stock Checkup.
MercadoLibre has a perfect 99 Composite Rating. Shares have an 82 EPS Rating and a 92 EPS Rating.
PDD Stock
China-based PPD has rebounded to its April 2021 highs as shares bolted 79% in 2023.
The parent company of Chinese e-commerce giant Pinduoduo and international site Temu saw its sales growth accelerate the past three quarters while earnings growth ranged from 28% to 117% during that period.
Shares leapt on the company's Q3 earnings results in late November but have started to consolidate. The conglomerate reported a 94% sales increase in local currency to $9.7 billion for the quarter, crushing FactSet forecasts of $7.7 billion.
PPD stock is trading around its 10-day moving average and holding above its 21-day line. It's still well extended from the 50-day line.
PDD is a member of the IBD 50 list and leads the Retail-Internet Group.
Shares have a perfect 99 Composite Rating and a 97 RS Rating.
PANW Stock
Cybersecurity firm Palo Alto Networks saw shares soar in 2023 amid a wave of high-profile hacking incidents and excitement about artificial intelligence developments.
Earnings growth slowed over the past two quarters but still ranged from an impressive 83% to 66% gains. Meanwhile, Palo Alto Networks reported 20% to 26% sales growth during that period.
PANW stock broke out from a flat base in late November and came up to a record 318 on Dec. 18. Shares have since pulled back to test their 21-day line at the end of the year.
Palo Alto Networks leads the Computer Software-Security Group and is a member of the IBD Big Cap 20 List.
PANW stock has a 99 Composite Rating and a 98 EPS Rating. Its relative strength line has dipped from its mid-December highs and has a 94 RS Rating.
PANW stock rocketed 111% in 2023.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
