Melissa Juried Kriebel
The hoped-for Santa Claus rally failed to materialize in last year’s bear market. Now it is the bulls, not the hungry bears, that remain in hibernation as the new year begins.
Action in the IBD Breakout Stocks Index (updated weekly) highlights that point. Yet some stocks, such as Elf Beauty (ELF), Box (BOX), AstraZeneca (AZN), Caterpillar (CAT) and others, show they may have the thick hides it takes to survive the bear market‘s claws.
You can see the scars left by the bear market in the chart for the IBD Breakout Opportunities ETF from Innovator Capital Management. The BOUT ETF tracks the companies on the IBD Breakout Stocks Index.
Last year was not kind to growth stocks, particularly tech names like Nvidia (NVDA) and Tesla (TSLA). But cloud-based storage and management leader Box is an exception.
With its relative strength line hitting a new high, BOX stock has shown market-leading resilience. The stock remains slightly extended, holding tough in tight trading after clearing a cup-with-handle buy point.
Fellow IBD Breakouts Stocks Index member AZN is also showing healthy trading. The Big Pharma play, which uses cloud solutions from Box, has also seen its RS line hit a new 52-week high. It is today’s IBD 50 Stocks to Watch.
Several other medical sector names on the IBD Breakout Stocks Index continue to show relative strength as the market indexes struggle as 2023 gets underway. Merck (MRK), AbbVie (ABBV), Globus Medical (GMED), and Catalyst Pharmaceuticals (CPRX) are performing better than former leaders like NVDA and TSLA stock.
See All The Names On The IBD Breakout Stocks Index
Oil Stocks Like XOM, CVX Leaking Under Pressure
After posting big gains and huge profits last year, leaks have shown up in energy stocks on the IBD Breakout Stocks Index.
Oil companies like Exxon Mobil (XOM), Chevron (CVX), Hess (HES), and Phillips 66 (PSX) have all fallen below their 50-day and 10-week moving averages.
While their stock charts reveal the technical challenges, PSX, HES and XOM stock all made a screen featuring today’s fastest-growing stocks. As Q4 earnings season approaches, EPS estimates for Hess (246%), Phillips 66 (241%) and Exxon Mobil (157%) all show big expectations from Wall Street.
Positive numbers in their next reports and an improvements in the market indexes could fuel new moves in these oil stocks.
Elves Are Now Out Of Season, But Not ELF Stock
Appropriately enough, ELF Beauty was one of the few growth stocks to have a festive holiday season. Since breaking out last summer, ELF stock has enjoyed the colder weather. Holding support along its 10-week line, the maker of cosmetics and skin care products has delivered remarkable gains as it relative strength line has soared.
Despite the bear market blues, ELF Beauty is setting up a new buy point in a flat base. ELF stock has also just earned a spot on the IBD Leaderboard watchlist.
Deere And CAT Stock Explore Bases In Bear Market
Heavy equipment leaders Deere (DE) and Caterpillar have also fared well in these challenging times.
As a maker of tractors, combines and other farming equipment, Deere continues to plow a new flat base showing a 448.50 buy point.
After breaking out last month then easing back, mining and construction equipment giant Caterpillar is digging its way back to a 239.95 buy point.
As the IBD Breakout Stocks Index shows, investors should watch any new breakouts within the context of the general market. In this challenging environment, failed breakouts are common. Plus, since it’s best to avoid making new buys during a market correction, now is a time more conducive to building a watchlist than expanding your portfolio.
IBD Breakout Opportunities ETF
The IBD Breakout Opportunities ETF from Innovator Capital Management tracks the IBD Breakout Stocks Index. As with other index ETFs, this fund allows you to invest in the entire index in addition to, or rather than, buying individual stocks. Learn more here about the ETF and Innovator funds.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
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