When a stock goes on a run, investors don’t want to chase. Better to wait for a new base, or a pullback to key support. Novo Nordisk (NVO), Eli Lilly (LLY), Booking Holdings (BKNG), Arthur J. Gallagher (AJG) and TJX Cos. (TJX) have all retreated to their 50-day moving averages.
With the pullbacks coming amid the ongoing market correction, the relative strength lines have held up near highs. A strong bounce from these levels could provide buying opportunities.
Denmark’s Novo Nordisk and Eli Lilly have boomed thanks to their weight-loss drugs. Lilly, Booking, AJG and TJX stock are all S&P 500 members.
BKNG stock is on IBD Leaderboard. Novo Nordisk, Arthur J. Gallagher and LLY stock are on the IBD 50. AJG stock is on the IBD Long-Term Leaders and IBD Big Cap 20.
Novo Nordisk earnings growth has accelerated for the last four quarters, with revenue gains picking up for the past three quarters. Credit booming sales for weight-loss drugs Ozempic and Wegovy.
NVO stock gapped out on Aug. 8 after the drug giant reported that Wegovy significantly cut cardiovascular risk. Shares ultimately peaked at 110.88 on Sept. 11. Since then, shares have pulled back to the 50-day line. A solid move would send Novo Nordisk stock above the 21-day line and break a short downtrend, offering an entry.
Eli Lilly earnings surged 69% in Q2, with revenue up 28%, both ending two quarters of declines.
LLY surged on the Aug. 8 earnings report and Novo Nordisk’s upbeat news about cardiovascular risk. Shares then ran up sharply to 601.84 on Sept. 14. Lilly stock has retreated to the 50-day line. Look for a bounce above a downward-sloping trendline.
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Booking earnings have soared 56%, 197% and 97% in the last three quarters. Shares gapped up after the Aug. 3 earnings report, soon peaking on Aug. 9.
Shares have forged a 7.5%-deep flat base with a 3,251.71 buy point, according to MarketSmith. Over the past several sessions BKNG stock has found support at the 50-day line. A strong bounce could offer an aggressive entry, with 3,226.457 as an early entry.
Insurance broker Arthur J. Gallagher has enjoyed three straight quarters of accelerating revenue growth, moving from -4% to 20%.
AJG stock has made a solid advance from a cup-with-handle base over the past few months, generally riding the 21-day line to a Sept. 20 high of 237.64. Shares have pulled back to just above the 50-day and 10-week lines. A solid bounce could offer an early entry.
One note: AJG stock has has several recent declines in above-average volume.
TJX earnings rose 28% in fiscal Q2 with revenue up 8%, both the past gains in five quarters.
Shares of the off-price apparel and home goods retailer broke out of a cup-with-handle base in early June, then ran up to 93.78 on Sept. 14. TJX stock has pulled back to the 50-day line. A bounce above Friday’s high could offer an early entry.
Please follow Ed Carson on X/Twitter at @IBD_ECarson and Threads at @edcarson1971 for stock market updates and more.
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