These 5 Leaders Just Carved New Buy Points: S&P 500 Futures
Futures for the S&P 500 index rose slightly Monday afternoon, as markets prepare for the first trading day of 2018. For the new year, here are five leading stocks that just formed flat bases at the very end of 2017: Amazon.com (AMZN), Facebook (FB), Mastercard (MA), Splunk (SPLK), RingCentral (RNG).
X Facebook and Mastercard are members of the IBD 50 list. Facebook boasts a best-possible 99 Composite Rating while Mastercard has a 98. Splunk (96) and RingCentral (95) also have 95+ Composite Ratings. That’s important, because all-time stock winners often have Composite Ratings of at least 95 near the start of their runs.
Amazon.com, for its part, has a 78 Composite Rating, reflecting its uneven profits.
S&P 500 futures was up a fraction vs. fair value. Nasdaq 100 futures lost nearly 0.1%. Dow futures rose 0.1%.
Amazon, like all the stocks on this list has a five-week consolidation, the minimum for a flat base. It’s really a base-on-base formation above an October base. The e-commerce giant has a buy point of 1,213.51. Shares closed Friday at 1,169.47.
Amazon appears to have been a big standout in the best holiday shopping season in years. The stock’s Relative Strength line is near record highs. The RS line tracks a stock’s performance vs. the S&P 500 index. Ideally an RS line should lead or confirm a breakout by at least hitting a short-term high
On the downside, Amazon is in a late-stage base. Late-stage bases can work, but are more apt to fail than first- or second-stage bases.
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Facebook rose 53% in 2017. But its standout performance peaked at the end of July and the RS line has trended slightly lower since Nov. 1. The stock hasn’t made much headway since late July either, while the broader averages continue to add to gains.
Facebook, which closed Friday at 176.46, technically is still within range of an older 175.59 buy point from an October breakout, but hasn’t made much progress since then and is currently below its 50-day line.
Facebook has now created a new flat base with a 184.35 entry. That may be what investors should focus on now.
Facebook and Amazon are both members of the FANG group of stocks. Including AppleAAPL, the FANG+ stocks are all at key technical levels right now.
Mastercard’s stock gradually outperformed the S&P 500 index for most of 2017, consolidating since late November. The RS line is modestly below record highs. Payment stocks, from traditional peers like Visa (V) to PayPal (PYPL) and Square (SQ), were big winners in 2017.
Mastercard tumbled through its 50-day line in early December, but was back above that key support within a few days. Since then it’s been holding just above that moving average, closing Friday at 151.36. The buy point is 154.75.
The data analytics firm began forming its latest consolidation shortly after gapping higher on strong earnings released Nov. 20. The stock’s RS line is near record highs.
Splunk ended 2017 at 82.81. The buy point is 84.98.
The cloud-based business communications software maker has found support at its 50-day moving average several times in the past few months.
RingCentral has a 50.05 buy point. Shares closed Friday at 48.40, with its RS line holding near highs as well.
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