Your stocks to watch for the week ahead include China-based online search engine giant Baidu, power utility subcontractor Quanta Services, U.K. pharmaceutical company AstraZeneca, health insurance and managed care business UnitedHealth Group and solar energy play Enphase Energy.
The stock market rally continued to regain strength the latter part of the week, with solid-to-strong gains for the major indexes. However, the uptrend remains under pressure. With job creation remaining strong, the Federal Reserve will likely keep raising interest rates aggressively for at least the next two meetings.
There are still good reasons to be cautious.
Medicals are the leading sector, as UnitedHealth and AZN stock indicated. But a growing number of stocks from other groups are showing strength. That's a positive sign for the market rally.
UNH stock is on IBD Leaderboard. PWR stock, Enphase Energy and UnitedHealth are on the IBD 50. Quanta Services and ENPH stock are both on the IBD Big Cap 20.
BIDU Stock
Baidu stock was fell 1.5% to 152.40 in Friday's stock market trading to 151.90. On the week, BIDU stock edgedup 0.6%, holding above its 200-day line. Starting with its peak in mid-February as the start of a base, investors could use 156.87 as a handle buy point.
Baidu, along with Alphabet's Google, is among the top players in the global internet search market. Baidu commands more than 70% of the search engine market share in China, according to market research.
As coronavirus lockdowns and regulatory crackdowns ease and Beijing mulls big new stimulus, China stocks are coming seem poised for growth, but they carry extra risk.
BIDU stock has a Composite Rating of 70. It has an 89 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share price movement with a 1 to 99 score. The rating shows how a stock's performance over the last 52 weeks holds up against all the other stocks in IBD's database. The EPS rating is 49.
Quanta Services Stock
PWR stock dipped 0.2% Friday to 131.26. But shares increased 4.6% on the week. Quanta stock was Thursday's IBD Stock Of The Day as it flashed buy signals amid decreased volume.
Quanta is working on a 138.56 buy point from an awkward cup-with-handle base, according to MarketSmith analysis. Within the deep handle, PWR stock broke a trendline and cleared last week's high of 129.86 on Thursday, albeit on light volume. Quanta stock is 9.9% above its 50-day line.
PWR stock's relative strength line is also at a new high. The RS line, the blue line in the charts provided, track a stock's performance vs. the S&P 500 index.
Analysts predict the Houston-based engineering and construction services contractor, will see its EPS rise by 28% in 2022 and by 10% in 2023, according to FactSet.
Quanta specializes in infrastructure projects for the energy and communications sectors, and its services include design, installation and repair of grid, network and power generation facilities. PWR lists operations throughout Canada, Australia, Latin America and the U.S.
PWR stock has a best-possible Composite Rating of 99. It has a 96 Relative Strength Rating. The EPS rating is 97.
AZN Stock
AstraZeneca stock inched up 0.1% to 66.98. For the week, the pharmaceutical giant rose 1.6%, after rebounding from a 50-day line test on Tuesday.
AZN stock is just below a 67.50 buy point from a double-bottom base. The base started when the stock peaked at 71.70 following a 14% gain from its previous breakout in March.
From the April 8 peak, the drug stock corrected twice. First to its 200-day moving average and then under it in the second pullback.
The U.K.- based company manufactures a vast variety of treatments, including a Covid vaccine and cancer drugs Tagrisso, Imfinzi and Lynparza.
Earnings grew 57% in the fourth quarter of 2021 and 16% in the first quarter of 2022. That's after falling 7% and then rising only 6% in the two previous periods.
AstraZeneca will report second-quarter results on July 29. Analysts predict profit will soar 98% to 81 cents a share vs. 41 cents a year earlier. Full-year EPS is expected to increase 34% to $3.34 from $2.49, according to FactSet.
AZN stock has a Composite Rating of 98, an EPS Rating of 83 and a 93 Relative Strength Rating.
UnitedHealth Stock
UNH was up 0.8% Friday to 518.63. Intraday, shares rose to 528.37, clearing a 518.80 handle buy point from either a double-bottom or cup base. UnitedHealth stock rose 0.2% for the week after testing its 50-day line Tuesday.
The RS line has moved into new highs as well.
In general, the managed care group has shown good relative strength, with Centene, Humana and Cigna hitting buy points in recent days.
More than its competitors, UNH has shown a better long-term uptrend, according to IBD Leaderboard analysis.
UnitedHealth's model aims to contain health costs for its managed care arm, partly by insourcing health services to its own cost-efficient locations. In April, UnitedHealth reported first-quarter earnings that beat expectations. The company also raised its full-year profit outlook. Its 14% annual EPS growth forecast for both 2022 and 2023 beats most of the industry peers.
Earnings are due Friday, July, 15 to report its earnings. That sets up a potential risk for would-be new investors.
UNH has a 96 Composite Rating. Its Relative Strength Rating is 95. It has a EPS Rating of 89.
ENPH Stock
Enphase Energy rose 4.65% to 216.45 on Friday, briefly clearing a 217.33 handle buy point on double-bottom base. However, ENPH stock jumped 10.6% for the week and is nearly 20% above its 50-day line.
The solar power company flashed buy signals on Thursday as it broke a downtrend in the handle. That was probably a better entry, given ENPH stock's big swings. Investors may want to wait for Enphase stock to consolidate again, if only for a week or two, to let the major averages catch up somewhat.
California-based Enphase is one of the world's top suppliers of microinverters for solar power. Q1 earnings rose 41% with revenue up 46%. Q2 results are likely due late this month.
Enphase Energy stock earns the No. 1 rank among its peers in the Energy-Solar industry group. The company has a best possible 99 Composite Rating. Its Relative Strength score is 97. Its EPS Rating is also 96.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
