These 4 stocks are from the MarketSmith Blue Dot scan in addition to being on the watchlist this week. All four have followed through, showing remarkable strength, rising on above average volume. The candidates were reviewed as part of the subscribers weekend video.
Summary
MarketSmith Blue Dot Scan
Jack Henry (JKHY) from the MarketSmith Blue Dot scan in addition to being on the watchlist this week took off as the week unfolded. The company is an IBD 50 leader and fintech stock, is rising for its fourth straight week with its shares approaching a $62.24 buy point. A break above this zone would suggest a follow though is in order.
Jack Henry & Associates provides core information-processing solutions for banks and credit unions. It also provides the back-end system that processes daily banking transactions and posts updates to accounts and other financial records.
The stock broke higher on Monday, gaining 4.57% this week. It’s RS line earnined an upgrade in the interim, climbing to 93 on Thursday.
The fintech stock’s relative strength line also hit a new high on the weekly chart, a great sign ahead of the potential breakout.
Now we are looking for above avergae volume as the stock builds the right side of a cup and handle base.
JKHY offers it’s core banking platforms to institutions of all sizes, with over 400 using Silver Lake, with assets ranging from $500 million to $50 billion. Jack Henry’s CIF 20/20 is used by banks with $3 billion in assets or less. CIF 20/20 is also the most cost-efficient solution for smaller banks with fewer users.
Episys is used by the vast majority of credit unions, with assets ranging from $3 million to $25 billion.
Costco Wholesale (COST) was also on the blue dot scan, rising above the 200d moving average last Friday. The stock was added to the IBD 50 list last week. The big-box retailer holds a bullish 96 Composite Rating. Its RS Line is hovering at 90. Earnings are expected to grow 10% in 2022 and 11% in 2023, left side panel.
Costco is building the right side of a cup base that bottomed out with a 34% pullback into May. The current leg higher came on an upgrade from Deutsch Bank, in a note to clients on Thursday July 14.
The bank’s analysts upgraded the stock from “Hold” to “Buy” and assigned a new price target at $579. The new price target suggests about 9.46% upside from Thursday closing price of $529.46.
“COST is one of the most consistent operators in our group, and its steady traffic gains and high membership renewal rates serve as key differentiators in an increasingly uncertain backdrop; recent monthly sales results point to consumer “trade in” to the club channel and the company’s fast inventory turns should help insulate it somewhat from inventory challenges currently faced by other retailers.”
Additional Stocks from the Blue Dot Scan Video Review
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Join us today in the trading room for our LIVE broadcast during market hours, as we navigate the current environment. Watch, listen, and trade from 9:20 AM to 4:15 PM Monday through Friday.
Happy Trading,
Vinny
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