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Breakout Watch: Follow these basics and buy areas as the market consolidates

As investors wait for this troubled market to find direction and hopefully restart its uptrend, some stocks are building new chart patterns or testing new buy zones. You will find many stocks on the IBD Breakout Stocks Index doing just that, including Pinduo-duo (PDD), Clean ports (CLH) and Quantum Services (REP).


Rebalanced weekly, the Innovator IBD Breakout Opportunities (BOUT) ETF has struggled this year, as have many tech and growth stocks. But the 50-day moving average of the BOUT ETF started finding a bottom and trending up.

As the BOUT ETF tries to reestablish its position, a wide range of stocks from different sectors are potential buying points.

These energy sector names include Conoco Phillips (COP), Murphy’s Oil (WALL), Hesse (IT IS), Devon Energy (DVN) and MPLX (MPLX).

Join Clean Harbors from industry group Pollution Control is the leader in waste management and renewable fuels waste connections (WCN). WCN stock was featured in IBD stock analysis on September 2. It continues to work a cup with handle showing an entry of 144.56, while CLH stock trades in a new buy zone.

See all names on the IBD Breakout Stocks Index

More stocks to watch in the wait-and-see market

Major real estate investment trusts, or REITs, also made an appearance on the IBD Breakout Stocks Index. Extra space storage (EXR) and Life storage (LSI) are both approaching possible breakouts.

On the technical side, Arista Networks (ANET) continues to build a large double bottom – a common chart pattern in volatile markets. ON Semiconductor (ON) shorted after hitting a new high on August 25, but is now trying to reload back to its buy point of 71.35.

agricultural giant Archer Daniels Midland (ADM) and dispatch center United Parcel Service (UPS) set up potential new moves.

As this year has shown, no stock is immune to the volatility of stock market indices. But even in a weak market, keep building and updating your watchlist.

When a strong uptrend in the market returns, market leaders – especially those who are establishing strong fundamentals with rising relative strength lines – are in the best position to generate the biggest gains.

IBD Breakout Opportunities ETF

Innovator Capital Management’s IBD Breakout Opportunities ETF tracks the IBD Breakout Stocks Index. As with other index ETFs, this fund allows you to essentially invest in the whole index in addition to or rather than buying individual stocks. Learn more about ETFs and Innovator here.

Follow Matthew Galgani on Twitter at @IBD_MGalgani.


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