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Grubhub, Redhat Lead These Three IBD 50 Stocks In Buy Range

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The IBD 50 list includes the 50 top-performing stocks based on a variety of fundamental and technical factors. Many are extended from buy zones. But Grubhub ( GRUB ), Redhat ( RHT ) and Atlassian ( TEAM ) are IBD 50 members in range from entry points. Ichor Holdings ( ICHR ) has fallen back below an early entry Monday morning.

Grubhub and Redhat boast best-possible 99 Composite Ratings, while Atlassian has a 98 Composite Rating and Ichor Holdings a CR of 95. All-time stock winners often have Composite Ratings of 95 or better near the start of their big runs.

Grubhub

Grubhub leapt 4.2% to 76.49 in Friday's stock market trading , blasting above a 74.90 buy point from a short flat base in volume that was 68% above normal. Grubhub edged down 0.2% to 76.33 Monday morning.

Before breaking out, the food-delivery service app had found support at its 50-day moving average.

With the S&P 500 index and other major averages sprinting higher, any stock that has been consolidating will be lagging. You can see that with the relative strength line, which tracks a stock's performance vs. the S&P 500 index. The RS line is the blue line in the charts below. Even with Grubhub moving comfortably above the buy point, the RS line is off its highs, though it is making progress. It also helps that Grubhub's RS line had a strong uptrend from late April to late December.

Redhat

Redhat broke past a 131.03 flat-base entry on Thursday, then added 3.3% to 135.22 on Friday, at the edge of the 5% chase zone. Redhat fell 1.1% to 133.75 Monday morning.

Volume was only 4% above average on Thursday's breakout, picking up to a 29% gain on Friday. But you'd like to see at least a 40%-50% volume increase over normal.

The Linux software firm's RS line is lagging the Dec. 18 level when the stock peaked, and is even further below its own high in late November.

Ichor Holdings

Ichor, which makes fluid delivery subsystems for chipmaking equipment, vaulted 31% to 32.39 in the week ending Jan. 19 thanks to bullish preliminary revenue figures and even better sales guidance. Ichor was up and down in the latest week, but closed 5% higher at 34.01. That was above an early entry point of 33.09 in a three-month consolidation but below a conventional buy point of 35.61.

Shares fell 3.5% to 32.81 in morning trade, dropping below the early entry.

Ichor could be in the process of forming a handle, which potentially could lower the entry area slightly.

Ichor's RS line has made a lot of progress over the past two weeks, though it is still off the consolidation highs. If you await a conventional entry, look to see if Ichor can blast higher, pushing its RS line above a short- and mid-term high.

Atlassian

Atlassian, a collaborative software maker, cleared a 53.55 buy point intraday on Jan. 16, closed above the entry the next session and then closed at 55.60 on Jan. 18, at the edge of its chase zone. But that evening, Atlassian reported better-than-expected earnings , but gave weak guidance for the current quarter. Shares fell back below their buy point in high-volume selling the next two sessions. Since then the stock has been moving above and below the still-valid entry point, climbing to 53.85 in low volume on Friday.

Atlassian rose 0.7% to 54.22 Monday morning.

Atlassian's RS line cleared a short-term high during the initial breakout, approaching the all-time peak. Since then Atlassian has pulled back somewhat while the market has kept advancing, so the RS line is lagging somewhat in the near term.

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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.

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