The prominent stocks poised for observation this week near potential buy levels include AI stocks Nvidia (NVDA) and Snowflake (SNOW). Mastercard (MA) is also on the radar. Similarly, United Rentals (URI) and Booking Holding (BKNG) are in focus.
Both SNOW inventory and NVDA stock are approaching purchase thresholds. Meanwhile, Booking and United Rentals are positioned within the buy range. MA stock, operating on a traditional entry point, indicates an initial entry signal.
Nvidia, Booking, and SNOW are featured on the IBD 50 list of top growth companies. While Booking Holding is highlighted on the Leaders list, NVDA stock is also a part of the IBD Leaderboard. Additionally, BKNG and Nvidia stock are part of the IBD SwingTrader selection.
Emphasizing Relative Strength
The majority of these leading stocks are witnessing an uptrend in their relative strength indicators, signifying outperformance against the S&P 500 index.
These top-performing stocks, including major players in the AI sector, are nearing potential buy points as the market rebounds from the summer downturn.
Significant AI Investment: Nvidia
After finding support at the 10-week moving average, shares of the AI technology leader are aiming to surpass a double-bottom buy level.
During the week, Nvidia stock rose by 1.6% to \(475.06. Although still below the \)476.09 buy point, NVDA breached the 21-day moving average, ending a brief downtrend and offering an early entry opportunity.
In early November, Nvidia stock initially surpassed the standard buy point, reaching a high of $505.48 on November 28.
However, following its recent quarterly earnings report, NVDA shares experienced a decline, primarily due to concerns regarding China’s AI chip exports.
Despite being below the consolidation high, Nvidia’s RS line is nearing a record peak.
Nvidia boasts impressive ratings in key IBD metrics, with an overall Composite Rating of 99 out of 100, along with strong EPS and RS Ratings.
Nvidia has outperformed 97% of all companies in the IBD universe in terms of price performance over the past 12 weeks, as indicated by a robust 97 Relative Strength Rating.
On November 21, Nvidia reported a staggering 593% surge in earnings and a 206% rise in revenue for the third quarter. The revenue growth accelerated compared to the previous quarter, with data center sales soaring by 279% in Q3, driven by the A100 and H100 AI chips utilized in AI applications.
Nvidia faces increasing competition in the AI chip market, with Advanced Micro Devices (AMD) recently unveiling its own AI chip lineup.
Snowflake Stock Overview
Snowflake, another notable player in the AI sector, has a cup-with-handle buy point at $192.66.
SNOW shares advanced by 2.5% to $190.67 during the week, nearing the entry level by 1%.
While the RS range is approaching the consolidation high, it remains notably lower than in 2020.
Snowflake’s Composite Rating stands at 96, supported by an EPS score of 82 and an RS Rating of 90.
Earnings for the fiscal year, ending in January, are anticipated to double after more than doubling for the entire year, according to FactSet.
Snowflake offers cloud-based data warehousing software and gained widespread recognition in September 2020.
Snowflake was the featured IBD Stock Of The Day on Friday.
Investment Insights on Booking Holdings
The travel booking platform’s shares approached a \(3,207.32 buy point on Thursday before reaching an all-time high on Friday. BKNG stock rose by 3.65% to \)3,275 for the week.
Although showing an upward trend, the RS indicator remains below its peak from May 2018.
Booking Holding boasts a Composite Rating of 98, accompanied by strong EPS and RS Ratings.
While revenue growth remains robust at 36% in the latest quarter, it is showing signs of deceleration.
The company, benefiting from heightened travel demand amidst market volatility, operates popular brands such as Kayak, Priceline, and Booking.com.
United Rentals Stock Analysis
United Rentals’ stock reentered the buy zone on Friday, with URI shares declining by 1.35% to $495.06 for the week. Notably, the stock surged by 1.6% on Thursday and 2.3% on Friday.
On December 1, United Rentals cleared the $488.73 cup-with-handle buy point.
While the RS indicator is on the rise, approaching the consolidation peak, it remains below the high set in February 2023.
United Rentals holds a Composite Rating of 96, along with solid EPS and RS Ratings of 85.
The company’s EPS growth ranged from 27% to 39% in the first three quarters of 2023, with robust sales expansion attributed to the acquisition of Ahern Rentals in late 2022.
The $1.2 trillion infrastructure bill passed in November 2021 continues to positively impact United Rentals’ stock, alongside the prevailing business momentum in the construction and infrastructure sectors.
Mastercard’s stock price dipped by 0.5% to $412.16, nearing regular highs.
Based on MarketSmith’s pattern recognition, Mastercard’s stock exhibits a flat base, presenting a buy point at \(418.60. Alternatively, investors may consider a \)416.60 entry, reflecting a V-shaped cup-with-handle base.
Mastercard’s weekly chart shows a three-week tight pattern at the $416.60 entry level.
While slightly below the consolidation peak, the rising RS indicator is close to all-time highs.
Mastercard boasts solid ratings, with an EPS Rating of 93, a Composite Rating of 86, and an RS Rating of 79.
With a notable 27% growth in the latest quarter, the company demonstrates accelerating revenue expansion driven by increased consumer spending on travel and leisure activities.
Recent reports indicate that Mastercard secured approval to expand its services in China’s extensive payment market.
Following its Q3 earnings report in late October, MA stock rebounded strongly from a sharp downturn as the broader market began to recover.
In contrast to the other stocks discussed, Mastercard’s RS line has shown limited advancement in recent weeks.
