4 Stocks From Our Popular Stock Screen In Or Near Buy Zones

Aug 29, 2023

Finding winning stocks to buy can be a challenge, but the Relative Strength Blue Dot stock screen quickly identifies market leaders with unusual strength.

The stock screen is part of the MarketSmith reports, and lists all stocks that have a blue dot on their charts.

The dot marks stocks whose relative strength line is at new highs while the stock is near a buy point or while forming a base. That's a bullish combination. (The RS line compares a stock's price performance to that of the S&P 500 on daily and weekly charts.)

IBD 50 stock Workday (WDAY) is in the 5% buy zone of from a 206.68 buy point. Shares gapped above a cup base in heavy volume May 25, after the enterprise software maker reported higher-than-expected fiscal first quarter earnings and sales.

Workday posted 58% EPS growth on 17% revenue growth. Analysts project a hefty 46% earnings growth in the current fiscal year that ends in January, and a 20% increase the next fiscal year.

Another IBD 50 stock Monday.com (MNDY) is in a buy range from a cup-base entry at 171.89. The cloud-based project management stock reported a surprise Q1 profit and higher revenue on May 15.

Management gave Q2 revenue guidance that topped analysts' forecasts and raised its full-year sales guidance above expectations.

Full-year 2023 EPS is expected to drop to 22 cents from the 73 cents in 2022, which was the company's first profitable year, according to MarketSmith. Analysts expect 52 cents a share in 2024 profit, up 138%.

Semiconductor test systems maker Aehr Test Systems (AEHR) is in a buy zone after hitting a 40.69 buy point Friday.

The two-day rally came after Aehr announced that a new customer ordered a system that makes special metal transistors for vehicles. Analysts expect impressive 51% EPS growth in the fiscal year that ended in May and a 77% increase the next fiscal year.

Lastly, cruise ship operator Carnival (CCL) is also in a cup base and nearing a 12.62 entry after already gaining over 52% this year.

Dave Sekera, Morningstar's Chief U.S. Market Strategist, said Carnival is benefiting from the "normalization of consumer behavior" after the pandemic with "healthy bookings" and "deposits are surpassing pre-Covid levels."

Follow Kimberley Koenig for more stock market news on Twitter @IBD_KKoenig.

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