5 Stocks In Or Near Buy Zones In Broad Market Rally

Microsoft (MSFT), Chipotle Mexican Grill (CMG), Wells Fargo (WFC), O’Reilly Automotive (ORLY) and Marriott International (MAR) are among stocks finding support at or near buy range as the stock market rally is back in a confirmed uptrend.


These stocks comes from different industry groups and sectors, a reflection of the breadth of market leadership right now. There’s also depth with a number of these stocks’ peers also showing bullish action.

Microsoft stock is on Leaderboard and IBD Long-Term Leaders.

How To Find Top Stocks

The market is rallying, so investors should be looking for stocks to buy. But there can be an overwhelming amount of information on how to find the best stocks. One way is to look at their IBD Composite Ratings. The Composite Rating compiles scores on five key fundamental and technical metrics: earnings growth and sales growth, profit margins, return on equity and relative price performance.

Microsoft’s stock and Chipotle’s stock have perfect 99 out of 99 Composite Ratings. O’Reilly has a 91 rating, Wells Fargo has an 85 and Marriott stock has a 61.

Investors should be focusing on stocks with a Composite Rating of 90 or higher but it isn’t the only metric investors should keep track of.

Chipotle Stock

Chipotle shares dipped 0.3% to 1938.59 in Friday’s stock market trading, but rose 1.55% for the week.

CMG stock found support at its 10-week line, opening up a buying opportunity. It’s also clearing a week of tight action and hitting a new high on Thursday, offering another entry point.

The relative strength line for Chipotle stock is at a record high. The RS line, the blue line in the charts provided, tracks a stock’s performance vs. the S&P 500 index.

Chipotle is the top-ranked stock in IBD’s Retail-Restaurants group. Fast-casual restaurants have done well during Covid-19 as restaurant patrons opt for safer takeout instead of dining in.

But several restaurant stocks are looking solid. Darden Restaurants (DRI) gapped out of a base last week on earnings, while Wingstop (WING) is in buy range and McDonald’s (MCD) is flirting with a breakout.

Microsoft Stock

Microsoft shares dipped 0.2% last week to 299.35. MSFT stock is finding support at its 10-week line. The stock now has a flat base on a weekly chart with a 305.94 buy point, according to MarketSmith analysis.

Investors could buy Microsoft stock here, off the 10-week line. That’s a good place to buy Long-Term Leaders. Investors also could wait for a little more strength. There is little distance from the official buy point.

The RS line for MSFT stock is just below all-time levels.

Microsoft is the top-ranked stock in IBD’s Computer Software-Desktop group.

Wells Fargo Stock

Wells Fargo shares edged up 0.3% to 47.95 on Friday, stretching its weekly gain to 3.2%. WFC stock broke its downturn starting on Wednesday as it regained its 50-day line. It’s still buyable from that early entry. But there is another potential buying opportunity as Wells Fargo stock now has an oddly-shaped double-bottom base with a 49.97 buy point.

Banking stocks have gotten a boost as the 10-year yield rose this week following Wednesday’s Federal Reserve policy update.

Bank of America (BAC) and JPMorgan (JPM) are showing similar chart action, both flashing early entries after breaking trend lines and reclaiming 50-day lines. Investors could use 42.94 as an entry point on a somewhat-awkward consolidation going back to early June. JPMorgan is poised to break out of a cup-with-handle base with a 163.93 buy point.

O’Reilly Stock

The auto parts supplier dipped 0.1% to 625.54 Friday but climbed 4.4% for the week. ORLY stock is just in buy range after breaking out of a flat base with a 621.83 entry point. The base was part of a base-on-base pattern.

A base-on-base pattern happens when a stock breaks out but then consolidates not far above the buy point, typically due to the general market selling off.

The RS line is at record highs.

Among other auto parts suppliers, AutoZone (AZO) broke out of a flat base with a 1666.73 entry point, following strong fiscal fourth-quarter earnings.

Marriott Stock

Marriott stock ran up 6% to 152.51 last week. MAR stock cleared a downward-sloping trend line on Thursday. It also rose above a short-term high of 149.80. The official buy point is 160.08 in a seven-month consolidation.

Hotels and other travel-related stocks are rebounding recently as Covid-19 cases fall and vaccination rates rise both in the U.S. and globally. The Biden administration last week agreed to open up travel to the U.S. for vaccinated European and other tourists starting in November.

Marriot is the fourth-best stock in IBD’s Leisure-Lodging group. Wyndham Hotels (WH) is number one.

Follow Gillian Rich on Twitter for investing news and more.


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