While a look inside the IBD 50 list of growth stocks reveals few stocks breaking out of proper bases now, there are some within buy zones after bouncing off their 10-week moving average. This can be a productive point to find growth stocks to buy.
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Stocks that break out and run up from a basing pattern often pause and pull back briefly. Those that find support at their 10-week moving average often bounce and go on to significant gains. So the first or second time a stock rallies off its 10-week line after a breakout offers a great secondary opportunity.
Growth Stocks To Buy: KLA
Semiconductor chip equipment maker KLA (KLAC) bounced off its 10-week line the past week at 413.43. The buy range goes up to 454.77. KLAC stock on Thursday reversed lower but held above the 10-week line as the stock market slid. This is the second time KLA has found support at the 10-week line since breaking out of a cup-with-handle base in September.
KLA ranks No. 2 in the chip gear makers group, according to IBD’s Stock Checkup. It has a perfect 99 Composite Rating, which combines several fundamental and technical ratings into one quick-read rating. The chip equipment group itself ranks No. 13 out of IBD’s 197 industry groups, up from No. 28 three weeks ago and No. 50 six weeks ago.
Another chip equipment maker, Onto Innovation (ONTO) is also trampolining off its 10-week line, putting it among potential growth stocks to buy.
ONTO stock dipped below the line on Monday, but rallied above it on Tuesday at 93.80. The buy range goes 10% higher to 103.18. Ranking No. 4 in Stock Checkup, the maker of automated chip measuring and inspection systems also boasts a Composite Rating of 99.
Smart Global, Others Rise From Support
Since breaking out of a cup base buy point of 80.09 on Nov. 1, ONTO stock advanced 26% to 101.26. It then pulled back to 88.41 on Dec. 20 intraday. That was just below that week’s 10-week moving average’s 89.24. The stock rallied during the course of the next two weeks before pulling back and finding support at its 10-line for a second time since the last breakout.
In the computer storage group, Smart Global Holdings (SGH) is also levitating off the 10-week line after a hard fall onto it Jan. 5 that followed its earnings report.
Smart Global ranks No. 2 in the computer data storage group, which itself has scaled the industry group ranks to No. 19 from No. 30 three weeks ago and No. 74 six weeks ago.
Another stock testing its 10-week moving average and worthy of consideration as a growth stock to buy is chip gear maker Teradyne (TER).
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Source: https://www.investors.com/research/growth-stocks-to-buy-ibd-50-bouncing-key-support-levels/?src=A00220&yptr=yahoo