Still feeling the claws of this year's bear market, tech stocks Alphabet, Microsoft and Nvidia failed again to regain a spot on the latest list of new buys by the best mutual funds. But Apple made a triumphant return after a two-month absence. It topped the list, pulling in over $1.7 billion from leading money managers.
But stocks from the medical sector once again broadly led this monthly updated stock screen. Including three companies in the medical software space, 40 medical industry-related stocks make an appearance.
Pfizer ($1.4 billion) and Eli Lilly ($1.3 billion) join AAPL stock in the billion-dollar club. UnitedHealth ($952 million), AbbVie ($818 million) and Elevance Health ($810 million) fall a little short of that elite status.
Among energy stocks, Exxon Mobil ($1.6 billion) leads. Semiconductor equipment maker KLA also earns a seat at the table, taking in an estimated $1.2 billion from the best mutual funds.
NVDA, MSFT and GOOGL again failed to make the cut. But the presence of Apple and KLA hint at an overdue rebound in tech stocks. Plus, Nvidia, Microsoft and Alphabet have all retaken some key moving averages.
New investments by the best mutual funds into stocks in stocks like Analog Devices, ON Semiconductor, Synopsys, CDW and Cadence Design Systems further point to a resurgent tech sector.
Note: Be sure to check these Excel files, updated and published each month, to see all the stocks on the latest list of new buys and list of new sells by the best mutual funds.
Build Custom Stock Screens To Find Stocks Meeting Your Own Criteria
The Best Mutual Funds Eye Stocks Setting Up
Risk management is key to long-term success in the stock market. And managing risk, especially during volatile times, means staying focused on the core concepts of stock investing.
First, stay in sync with market trends since most individual stocks follow the direction of the major market indexes. Second, understand the story behind the stock. Look for companies with innovative products driving strong earnings and sales growth. Finally, use the relative strength line, moving averages and the price and volume action in the stock chart to gauge demand. The biggest money is made — with the lowest risk — when all these elements line up and a stock forms a chart pattern and breaks out.
Now apply this approach to stocks on the list of new buys by the best mutual funds.
AAPL stock, for example, has come off its bear market lows, retaking its 40-week moving average. While its 10-week line remains below the 40-week benchmark, the 10-week line has begun to trend higher. In a sign of market leadership, Apple's relative strength line has already hit a new 52-week high as it continues its rebound.
With oil and gas stocks leading the market this year, XOM stock fueled a new high in June before pulling back. The energy giant is now building a new consolidation, but has slid below its 50-day line in heavy volume despite posting big earnings growth on July 29.
Chevron is showing somewhat similar action while also generating explosive EPS gains in recent quarters. CVX stock also failed to find support at its 50-day line. The latest action in CVX and XOM are reflected in recent weakness in the Energy Select Sectors SPDR ETF.
More Stocks To Watch In Or Near Buy Zones
Volatility, inflation and geopolitical uncertainty remain. But strength returning to AAPL and other tech stocks — plus an expansion of names on the latest list of new buys by the best mutual funds — bodes well for the market.
KLAC stock has cleared a 372.44 buy point in a double bottom, a common chart pattern in volatile environments. ON Semiconductor is also etching a breakout from a double bottom.
With House Speaker Nancy Pelosi's Taiwan visit and other hot spots around the world making news, leading defense stocks also look to secure new breakouts. TransDigm has put a 633.44 buy point, also from a double bottom, in its sights. Heico has flown into a buy zone. Meanwhile, L3Harris Technologies and Lockheed Martin have reclaimed their 50-day lines.
Retail stocks in or near new buy zones include Costco, Dollar Tree and Dollar General.
On the medical front, UnitedHealth, Vertex Pharmaceuticals and Eli Lilly are among many stocks testing new breakouts and buy zones.
This is just a small sampling of all the names that make this month's list of new buys by the best mutual funds. Many are setting up as a new uptrend takes hold.
Be sure to check the Excel list in this article to review the stock ratings and stock charts for each company of interest.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
