S&P 500 stocks You’re here (TSLA) and DexCom (DXCM), as well as Fluency Energy (FLNC), wing stop (WING) and Extreme networks (EXTR) are in the spotlight this week.
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The market recovery accelerated at the end of the week. Scope also improved, although market leadership remained concentrated in the area of artificial intelligence. Yet many other stocks are starting to send buy signals or are about to do so.
Congress approved the debt ceiling legislation last week and Fed officials signaling a rate pause in June likely helped support the market.
Meanwhile, the U.S. economy added 339,000 jobs in May, significantly above Wall Street estimates that had raised employers’ payrolls by 190,000. The unemployment rate rose to 3.7%, in above the estimate of 3.5%. Average hourly earnings rose 4.3% from a year earlier, just below views.
However, while the action appears to be accelerating, this is a small sample size with the market in a confirmed uptrend. Investors need to be patient and allow many stocks to settle before plunging. The five stocks, including two S&P 500 giants, featured this week offer options until a broad market rally sets in.
S&P 500 TSLA and Wingstop stocks are featured in the IBD ranking. Meanwhile, Fluence stocks as well as Wingstop are on the IBD 50. Fluence Energy, Wingstop and EXTR stocks were all IBD Stock Of The Day picks last week.
S&P 500: Tesla Stock
Tesla stock jumped 3.1% to 213.97 in Friday trading, capping a weekly gain of 10.8%. Tesla stock rose more than 24% in May and is now up more than 100% from its January low.
The S&P 500 stock formed a cup base with a buy point of 207.89. The pattern could also be read as a double bottom base, but the buying point remains the same. The base, until this week, was forming below 200 days, which is not ideal. But the 200-day line fell below the 200 level and below the buy point.
Notably, TSLA stock has advanced on above-average volume for five consecutive sessions, following few such days in the previous three months.
Meanwhile, the global electric vehicle giant has once again slashed prices on in-stock vehicles in the United States to attract consumers this week.
The S&P 500 stock ranks seventh in IBD’s automaker industry group. TSLA has a composite rating of 75 out of 99. Tesla stock has a relative strength rating of 39. The EPS rating for Tesla stock is 93 out of 99.
Fluence Energy Stockpile
The FLNC fell 2.6% to 23.57 on Friday. Meanwhile, over the week, Fluence Energy stock was up 2%. FLNC shares are below a buy point of 24.87, but are still trading above an early entry after breaking the downtrend of the handle, according to MarketSmith analysis.
FLNC is up more than 50% since hitting a low of 15.82 on May 4. Fluence Energy stock jumped more than 37% in May and 39% since the end of 2022. On May 11, Fluence Energy announced a better than expected Q2. 2o23 financials and equities jumped about 7%. This came after a surge in volume rising in early May around earnings.
Similar to Tesla’s Megapack energy storage business, Virginia-based Fluence Energy offers grid-scale energy storage products and services. As with Tesla, Fluence uses batteries from China’s CATL. Fluence also develops artificial intelligence applications to maximize renewable energy storage solutions. In a joint venture, Siemens (SIEGY) and AES (AES) founded Fluence Energy in June 2021.
Fluence Energy has yet to report a profit. But analysts predict that will change soon as the Cut Inflation Act is expected to be a tailwind for renewable energy projects in the United States in the coming years. The addition of renewable energy projects increases the need for battery storage, while the IRA offers large subsidies for such storage.
In the second quarter, FLNC announced a loss of 14 cents per share. That was less than expected and down from a loss of 31 cents a year ago. Meanwhile, second-quarter revenue soared 103% to $698 million.
Fluence Energy stock ranks second in IBD’s Alternative-Energy/Other industry group. FLNC has a composite rating of 83 out of 99. The shares also have a relative strength rating of 97. The EPS rating for Fluence Energy stock is 55 out of 99.
Fender stop bracket
WING plunged 0.5% to 197.77 on Friday, down 1.5% for the week. Wingstop’s stock has soared nearly 44% so far in 2023.
WING found support Friday at its 50-day moving average and 10-week line, near a previous buy point of 193.84 for consolidation. However, a move above Wednesday’s high of 202.43 could offer early entry. This would see WING push above its 21-day line and break a downtrend, while still trading near its 50-day/10-week lines.
The Wingstop stock also now has a new flat base with a buy point of 223.87.
The Addison, Texas-based restaurant chain has averaged a 75.5% rise in profits over the past four quarters, while sales gains have averaged 35.8%.
Wingstop easily topped first-quarter estimates on May 3. Earnings jumped 74% to 59 cents per share while revenue jumped 43% to $108.7 million. Wingstop, which operates in 44 states, also reported that national same-store sales increased 20.1% in the quarter. Its digital sales reached a record 65.2% of overall sales.
For the year, Wingstop has guided national high single-digit same-store sales growth in 2023. FactSet expects same-store sales growth of 6.7%. Analysts see full-year earnings jump 14.5% to $2.12 a share on an 18.6% rise in sales to $424 million.
The Wingstop action has a composite rating of 95 out of 99, the best possible. WING has an EPS rating of 98 based on its strong earnings growth. The stock has a near-perfect relative strength rating of 97.
S&P 500: DexCom Stock
DexCom stock rose 2.5% to 122.57 on Friday, up 6.5% for the week. The S&P 500 stock broke an early entry after a bearish trend as it climbed back above its 50-day moving average.
DXCM formed a flat base with a buy point of 126.54, according to MarketSmith. But that’s right next to two other consolidations dating back to early November.
Over the past seven months, DexCom has reached the top of its recent ranges, only to fall back to the 50-day line or below.
DexCom specializes in a wearable Continuous Glucose Monitoring (CGM) system for people with type 1 or 2 diabetes, ages two and up. The sensor measures glucose levels just under the skin and sends the readings to a smart device in real time, without pricking your finger.
DexCom shares sold for five days in heavy volume after posting better-than-expected first-quarter earnings on April 27, although some of the losses were modest or lower.
DexCom reported earnings growth of 113% and sales up 18%. DXCM executives also raised the company’s full-year revenue forecast to $3.52 billion, up from the previous estimate of $3.4 billion.
The S&P 500’s DCXM stock ranks third in IBD’s medical products industry group. DexCom stock has a composite rating of 98 out of 99. S&P 500 stock has a relative strength rating of 91. The EPS rating for the S&P 500 stock is 98 out of 99.
Extreme network stock
EXTR jumped 4.9% to 21.87 on Friday and 16.4% on the week, with above average volume throughout the week. On Friday, Extreme Networks stock rose above the 21.13 buy point after a six-month consolidation.
Extreme Networks has jumped 49% since its April 19 intraday low at 14.67. Earlier last week, shares of Extreme Networks offered early entries around the 20 level. But now, EXTR is 22% above its 50-day moving average. While remaining in the traditional buying zone, a pause around current levels would be constructive.
Extreme focuses on cloud-managed networking solutions, automation, analytics, and artificial intelligence to optimize performance and security. The company has weathered supply chain constraints and is now working on an order book that could drive revenue growth even as the U.S. economy weakens.
Extreme Networks bought wireless networking equipment maker Aerohive in 2019 and Ipanema in 2021. With the purchase of Ipanema, Extreme entered the SD-WAN market. SD-WAN technology centrally manages and accelerates cloud computing applications. With software-defined networks, businesses have less need for expensive private data networks leased from telecommunications companies.
Extreme Networks stock has a composite rating of 99. EXTR has an EPS rating of 91. The stock has a near-perfect relative strength rating of 95.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
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