Table of Contents
The stock market rally continues to show broad-based strength. Investors should be looking across sectors for buying opportunities. Wingstop (WING), Lam Research (LRCX), Halliburton (HAL), Boeing (BA) and JD.com (JD) are all near buy points.
WING stock and JD.com are flashing early entries, while oilfield services giant Halliburton is in a buy range. Lam Research is just below a buy point. Boeing, after a big run, has formed a handle on a big, long consolidation. Halliburton, Boeing and Lam Research have earnings out of the way.
WING stock surged 11.4% last week to 157.88.
The Dallas-based aviation-themed chain’s earnings and sales growth has accelerated in the past two quarters, to 55% in Q2 and 41% in Q3. For its fourth-quarter earnings on Feb. 22, analysts expect Wingstop earnings to skyrocket nearly 71% to 41 cents per share, among the company’s implied guidance of 37-39 cents. Sales are seen rising 41% to $100.8 million.
WING stock is in “consolidation,” which is a catchall term for attractive chart patterns that don’t quite conform to proper base definitions. The current trading pattern has a 170.97 buy point, according to MarketSmith.
Investors could use Thursday’s push above Wingstop’s 50-day moving average as an aggressive entry opportunity. A close below the 50-day line would mark an exit point.
Wingstop’s relative strength line has fallen off a bit after moving to highs in early January, but is picking up in the past several sessions. WING stock has an 89 RS Rating out of 99, indicating it’s outperformed most of its peers over the last 52 weeks. The company’s strong earnings translate to a stellar 95 EPS Rating. And it has a 87 Composite Rating, which combines a number of technical indicators into one easy-to-read score.
Fremont, Calif.-based Lam Research is on the IBD Tech Leaders stock list and the IBD Big Cap 20 list. The chip-equipment maker beat quarterly views late Thursday, with earnings and sales gains accelerating the last three quarters.
For Q2, Lam’s earnings rose 26% to $10.71 per share on 25% revenue growth to $5.3 billion. But Lam provided a weak guidance as its customers, especially memory-chip makers, are being cautious with spending. In response, Lam announced plans to cut 1,300 jobs, or about 7% of its workforce.
For its third quarter, Lam forecasts adjusted earnings to decline 12% to $6.50 per share on a 6% dip in revenue to $3.8 billion. That’s well below Wall Street’s earnings outlook of $7.78 per share on $4.35 billion in revenue.
Lam Research stock is working on a bottoming base, with much of that above its 50-day and 200-day moving averages. Bottoming bases are similar to cup bases, except they often form within a deep consolidation.
LRCX stock reclaimed its 50-day and 200-day moving average at the beginning of the month, and bounced off its 10-day line on Jan. 20. Its current base has a 504.65 buy point. But a move above its Thursday high of 498.94 offers an aggressive early entry opportunity for investors.
Despite the weak guidance. LRCX stock rose 2.2% for the week to 482.88. Shares are up 15% so far in 2023.
Halliburton is one of the world’s largest hydraulic fracturing operators. The Texas-based oil and natural gas services giant posted positive earnings and revenue growth for the past seven quarters, fueled by rising energy prices and ramped up drilling production.
Q4 earnings, released Jan. 24, doubled to 72 cents per share while revenue rose 30.5% to $5.6 billion. That beat analyst earnings forecasts of 67 cents per share and was in line with sales estimates.
HAL stock is trading in the buy zone for its 30-week, cup-with-handle base following its earnings report. Shares broke out on Jan. 6 after surpassing its 40.09 buy point. The buy zone, which extends 5% above the buy point, runs through 42.09.
Shares have an 89 RS Rating as the relative strength line slid from mid-January highs. Halliburton has an 80 EPS Rating and perfect 99 Composite Rating.
HAL stock edged down 0.4% to 40.52 for the week, but rebounded from the 10-week line on Wednesday and finished the week in the buy zone.
Airplane maker Boeing surprised investors with a large fourth quarter loss Wednesday, as rising costs weighed down recovering jet deliveries. Boeing reported a core loss per share of $1.75 even as revenue jumped 35% to $19.98 billion. That was much lower than the Wall Street expected earnings of 30 cents per share and $20.18 billion in revenue.
The commercial airplanes unit reported a negative operating margin of 6.8%, reflecting “abnormal costs and period expenses, including research and development.” Still, Boeing delivered 480 airplanes in 2022 and won 774 net new orders, compared to 340 deliveries and 479 new orders in 2021.
Boeing remained bullish on 2023.
Boeing stock is extended from its November 2022 breakout past 173.95, following a strong rally off late September lows. The recent pause could be viewed as the handle for a huge consolidation going back to early last year. In that case, BA stock has a 216.74 buy point, just above the handle’s peak.
Boeing stock has a lowly EPS Rating of 25 following its six consecutive quarters of losses. However, its relative strength line is near highs from early January and it has a 94 RS Rating. Boeing stock has a 73 Composite Rating.
BA stock rose 2.1% last week and up nearly 11% so far this month.
China-based online retailer JD.com has been consistently profitable for years, with annual growth since 2018. Earnings growth has accelerated for the past two quarters and soared 80% in the third quarter. But revenue growth the past six quarters, falling to 1% for the September-ending period due to pandemic shutdowns and disruptions. However, China stocks have rallied recently after the country began reopening and loosening Covid restrictions in December.
JD stock is trading in a cup-with-handle base within its deep, messy consolidation. It currently has a 67.19 buy point according to MarketSmith, with shares facing a lot of resistance in the 67-68 range over the past 10 months. It’s arguably actionable now from breaking its downtrend handle and bouncing off its 21-day exponential moving average on Jan. 26, offering an aggressive entry.
JD stock has a near-perfect 98 EPS Rating, 93 RS Rating and 98 Composite Rating. JD stock rose roughly 5.5% the past week. Shares are up 13.6% the past month and 68.5% over the last three months.
You can follow Harrison Miller for more news and stock updates on Twitter @IBD_Harrison.
YOU MIGHT ALSO LIKE: