Growth Stocks: Four IBD 50 Stocks Are At Risk, With One Already Dropping Off

The elite IBD 50 consists of top-rated growth stocks meeting stringent criteria. But for four of them, charts are showing weakness.

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These signs are a warning to investors that it may be time to sell, trim a position or wait for things improve before buying.

Fluence Energy (FLNC) has triggered a sell signal after breaking out of a cup base with a 26.78 buy point on June 6. It also topped a handle entry at 24.77 prior to that.

The energy storage stock started its climb following its March-ended quarterly report on May 10, when its CEO said the company expects some rewards from the Inflation Reduction Act in the second half of the year.

Shares plunged below the 21-day exponential moving average on June 23 in heavy volume. That 7.3% drop triggered the round-trip sell rule from the 26.78 and 24.77 buy points. Shares are now testing the 50-day moving average amid uncertain chart action.

The company is not yet profitable, but analysts see the company showing a small profit in the fiscal year ending in September 2024.

Software Growth Stock Triggers Sell Rule

Monday.com (MNDY) broke out of a cup base with a 171.89 buy point on May 31, after Piper Sandler reiterated an overweight rating on the stock with a 200 price target.

Shares climbed to a 52-week high of 187 on June 16, but closed down 2.2% in a bearish reversal that marked Monday.com’s top.

Shares of the growth stock continued to drop and are below the 21-day line. The relative strength line has been on a downward spiral since June 1, another problem.

Thursday’s 2.2% loss triggered the 7% loss-cutting rule. The workflow management platform stock found support near its 50-day line, offering some hope of a rebound.

The company’s 2023 earnings are expected to decrease 70% from 2022, which also works against this leader.

Robotics Stock Takes A Plunge

Symbotic (SYM) took off following the company’s Investor Day on May 18. Shares soared to a 52-week high of 53.83 on June 15.

But then, a five-day sell-off started June 20 that ended the stock’s momentum. Shares held around the 21-day line, which gave the stock at least a temporary respite while it seeks direction.

Symbotic received negative press after NINGI Research issued a short report on the robotics stock on June 29. UBS downgraded the stock to a neutral from a buy rating the same day.

The warehouse robotics company has posted full-year losses since going public in 2021, with analysts not expecting a profit until fiscal 2024.

MercadoLibre (MELI) dropped out of the IBD 50 list of hot growth stocks after its 7.5% plunge on Thursday in heavy volume.

That wasn’t the only bearish action for this growth stock.

Shares of the Latin American e-commerce and payments company fell below the 50-day line in early June and have found resistance at that line. Also, the relative strength line appears to be in a faster downward path than the stock itself.

The company’s quarterly sales growth has decelerated for the last four quarters, although earnings have been rising.

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

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