China-based electric-vehicle maker and battery giant BYD, lithium and fertilizer giant Sociedad Quimica Y Minra, bargain retailers Dollar General and Grocery Outlet, and media and live events company World Wrestling Entertainment are five stocks showing resilience amid a tough market environment.
The Dow Jones Industrial Average, S&P 500 and Nasdaq composite suffered steep weekly losses, all tumbling to their worst levels since late 2020.
It's not a time to be buying stocks, but investors should be building up watchlists with stocks that are holding up relatively well.
WWE stock is on IBD Leaderboard. SQM stock is on the IBD 50. BYD was Friday's IBD Stock Of The Day.
BYD Stock
The Warren Buffett-backed EV maker has shown skyrocketing growth. It's posted seven straight quarters of at least double-digit sales gains. BYD stock popped 4% on Friday to 37.45. But shares fell 4.1% for the week, ending a five-week win streak.
Sales of its electric vehicles and plug-in hybrids are set to overtake Tesla's in Q2 in units sold, with BYD launching a slew of new models in the coming quarters. BYD makes its own batteries and chips, which helped it better manage an industrywide shortage, especially during the pandemic. It reportedly will soon start supplying batteries to Tesla, though the Texas-based company has not confirmed a deal.
BYD stock has a 41.34 cup-base buy point on a daily chart, according to MarketSmith. On a weekly chart, the EV giant has a handle with a 39.81 buy point. The handle needs a couple more days on a daily chart. Ideally, BYD would have a long handle, maybe long enough to be its own base, to offset the deep cup base and let the major indexes catch up.
The company's fundamentals aren't great though. BYD spent a lot on capital expenditures in 2021, but that's paying off in massive EV/battery capacity. BYD EV and plug-in hybrid sales have topped 100,000 vehicles for the past two months, surging vs. Q1 and a year earlier. Growth should continue to boom over the next several quarters amid new models and markets.
BYD's relative strength line is taking a bit of a breather after surging in the past few weeks to a record high. Its EPS Rating is 56 out of a best-possible 99, and below the 80 and above IBD recommends. Its RS Rating is 96.
Tesla Vs. BYD: Which EV Giant Is The Better Buy?
SQM Stock
The Chilean producer of specialty fertilizers, iodine and industrial chemicals is finding support at its 50-day line after giving up some gains. SQM stock rose 2.1% to 90.29 on Friday, down 6% for the week.
SQM surged out of a consolidation past a 90.97 buy point on May 19, racing to a 52-week high of 115.76 on May 27. But almost as quickly, it round-tripped a 27% gain.
The company is benefiting from the insatiable demand for lithium, which is used in making EV batteries, as EV adoption grows.
SQM delivered a more-than-10-fold increase in earnings in the most recent quarter. Sales nearly quadrupled. Lithium sales volume surged 59% as prices of the mineral exploded 572%.
SQM and BYD stock are both key components in Global X Lithium & Battery Tech ETF, along with Tesla.
Dollar General Stock
Shares of the discount retailer are trying to hold around the 50-day line, falling 1.1% to 230.80 for the week. DG stock has a cup-with-handle base buy point of 240.07.
With recession looming, even Dollar General shoppers are having to tighten their belts. U.S. consumers, the backbone of economic growth, are not as optimistic these days as they usually are.
Dollar General has struggled to top sales and earnings growth rates it posted during the pandemic. Nevertheless, the company boosted its outlook for the year in its latest quarterly report, as shoppers continue to look for deals to mitigate inflation pain.
Dollar General said it expects net sales growth of 10% to 10.5% vs. previous views of about 10%. It raised its same-store sales growth forecast to around 3% to 3.5% compared with its previous expectation of 2.5%.
DG stock's RS Rating hit a new high of 92 last week. The RS Rating tracks a stock's share price performance over the last 52 weeks vs. all other stocks. The best stocks will often rate over 90 at the time they launch a big price run.
Dollar General's relative strength line is rising as well. The RS line, the blue line in the charts shown, shows a stock's performance vs. the S&P 500 index. Dollar General's EPS Rating is 78.
Stock Market Forecast For The Next Six Months
Grocery Outlet Stock
Emeryville, Calif.-based Grocery Outlet on June 16 announced its latest East Coast expansion, with the opening of a new store in Maryland. The expansion marks the extreme-value grocer's entrance into its eighth state.
Founded in 1946, Grocery Outlet also has locations throughout California, Idaho, New Jersey, Nevada, Oregon, Pennsylvania and Washington.
As food prices continue to soar, Grocery Outlet is likely to be a top choice among shoppers squeezed by inflation.
GO stock is extended, but keep an eye on it to see if it sets up again. Shares hit a 52-week high of 41.36 intraday on Friday, before pulling back to edge down 0.7% to 40.15. GO stock rose 3.9% for the week.
WWE Stock
The media and entertainment company produces and markets TV, pay-per-view programming and live events.
WWE stock has slipped in recent days amid scandal. CEO Vince McMahon stepped down on Friday, as investigators look into a $3 million hush payment over an alleged affair.
WWE has a 68.82 cup-with-handle buy point. The stock found support at its 50-day line on Friday.
It previously cleared a flat base with a 63.81 buy point. But the focus should be on the cup with handle or, perhaps, a bounce off its 50-day line.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
