This Top Growth Name Is Breaking Out; 2 Other Stocks Follow Suit

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With the S&P 500 and the Nasdaq on track to extend their winning streaks to six trading sessions, a mix of stocks were breaking out and hitting new highs in the stock market today . Among them were an IBD 50 member, a blue-chip stock and a regional bank.

[ibd-display-video id=3072810 width=50 float=left autostart=true] PayPal ( PYPL ) moved up 1.7% in early trade to 80.39, before trimming gains to 0.9% in midday trade. Shares broke out past a 79.49 flat-base buy point and were in the 5% buy range that tops out at 83.46.

Early Tuesday, Cowen upgraded the payment processor from market perform to outperform with a price target of 88 - an 11% premium to Monday's closing price.

PayPal - a top stock of 2017 - has five quarters of accelerating earnings growth and two quarters of accelerating revenue growth. In the most recent quarter, year-over-year earnings and sales grew 31% and 21%, respectively.

According to the IBD Stock Checkup , the IBD 50 member has a highest-possible 99 IBD Composite Rating. The rating is a blend of key fundamental and technical metrics designed to gauge a company's leadership potential.

PayPal is a member of the card and payment processing industry, which is ranked No. 44 out of 197 groups .

A potential flaw is the stock's relative strength line - the line painted in blue on every IBD daily and weekly chart. Right now, the line is lagging the share price. Ideally, the line should reach a new high on the breakout day or shortly thereafter, confirming the strength of the breakout.

Johnson & Johnson ( JNJ ) surged 2.7% to an intraday high of 145.68, as the stock held on to the bulk of those gains midday. Shares moved past a 144.45 flat-base entry.

The Dow component has been a steady riser since the stock reached multiyear lows in February 2016, and has an A- Accumulation/Distribution Rating. The strong rating indicates solid institutional demand over the last quarter.

In the latest reported quarter, earnings growth rose 17% vs. the year-ago period. CNBC reported that Johnson & Johnson is likely to benefit from the tax overhaul approved in December.

Financial stocks were on the move higher Tuesday. Regional bank East West Bancorp ( EWBC ) rose past a 64.02 flat-base buy point. Volume was unimpressive, however.

A previous breakout on Nov. 30 above a 62 flat-base entry faltered almost immediately, but never triggered an explicit sell signal, as it eventually found support at the 50-day moving average line. Over the next several weeks, the stock would slowly construct its new flat base.


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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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