Another Day, Another Breakout; Two More Top Stocks Near Buys

The major market averages continued their surging advances in 2018, but turned negative Tuesday in afternoon trade. The first two weeks of 2018 have seen a number of high-quality growth stocks break out past proper entries and move higher. Today's action features another breakout, while two others are within striking distance of a potential buy point.

[ibd-display-video id=3086072 width=50 float=left autostart=true] Leaderboard watchlist member Atlassian ( TEAM ) is breaking out past a 53.55 buy point of a cup-shaped base formation in the stock market today . The stock advanced almost 2% after trimming gains and is back under its entry. The buy range tops out at 56.23. Volume was tracking about 100% above average, as institutions flooded into the stock ahead of this week's earnings release.

While the stock's relative strength line isn't at a new high, it has definitely been trending in the right direction since the start of 2018 and is approaching its old highs. Ideally, the relative strength line - the line painted in blue on every IBD and MarketSmith daily and weekly chart - should hit a new high on the breakout day or shortly thereafter.

In the latest quarter, Atlassian's earnings and sales grew 20% and 42%, respectively, vs. the year-ago period. The IBD Sector Leader will report its current quarter's earnings results Thursday after the market close. Analysts expect the firm to earn 12 cents per share on $204.5 million in revenue - respective increases of 33% and 37% vs. the same quarter prior year.

Meanwhile, Workday ( WDAY ) was shaping a new cup-shaped base - with a 116.99 entry - above its 10-week line after a previous cup with handle failed in disastrous fashion.

A significant flaw is the stock's RS line, which still has a lot of work to do before catching up to its prior levels. Still, the stock has performed well in 2018, rebounding off its 200-day line and recapturing its 50-day line.

Earnings soared 243% in the most recent quarter. Analysts expect the cloud-based software developer's earnings to grow 547% in fiscal 2018, which ends Jan. 31.

Elsewhere, Primerica ( PRI ) is nearing a second-stage flat base's 106.50 buy point as it trends higher along with its 10-week line. A previous correction in May 2017 saw the stock break down under the lows of the previous base, resetting the base count back to one.

A previous breakout on Oct. 9 above a 85 first-stage cup-base buy point yielded a 25% gain, allowing investors to potentially lock in profits at that level. Investors with higher levels of conviction could decide to hold for a bigger gain given the stock's strength during that time frame.

The life insurance provider's earnings and sales grew 20% and 11%, respectively, in the most recent quarter. Earnings are due Feb. 7 after the market close.

Tip: Before making any investment decisions, be sure to check current market conditions , and use IBD Stock Checkup to see if your stock gets passing ratings for the most important fundamental and technical criteria. To get ongoing chart analysis, and alerts to buy and sell signals, check out Leaderboard and SwingTrader .


Two FANG Stocks And A Top Growth Name Sketch New Buy Points

Traders Eye Results From Interactive Brokers, Atlassian

These 4 Top Tech Stocks With Strong RS Lines Hit Buy Points

More Banks, More Cars, More Earnings: Investing Action Plan

Q4 Earnings Preview: Who Joins Netflix On List Of Stocks Expecting 50%-Plus Growth?

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.