Techs, FAANG Stocks Jam; This Top Growth Stock Flashes Bullish Early Breakout – Investor's Business Daily

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Wall Street showed continued confidence in the economy on Thursday as FAANG companies and other market leaders flexed strength in stocks today. The buying surge offset weak moves by some names in the apparel retail, department store, and bank industries.

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At around 3 p.m. ET, the Nasdaq composite roared more than 1.2% higher.  The S&P 500 and the Dow Jones industrial average trailed with gains of nearly 0.8%. Volume is running higher vs. the same time Wednesday on the Nasdaq, lower on the NYSE.

Meanwhile, enterprise software firms firmed up their leadership role with more gains. Two top names in HR, finance and payroll management, Workday (WDAY) and Paycom Software (PAYC), advanced 3% and 2%, respectively.

Workday joined the IBD Leaderboard as a 10th current stock in the hand-selected list of top growth companies. It triggered an aggressive entry point in a Shakeout + 3 pattern. Workday has also been forming a double-bottom base, one of the eight bullish patterns that every growth investor needs to know to time their buys in the strongest market leaders.

The Nasdaq 100, tracking the 100 largest nonfinancial companies on that all-electronic exchange, rose 1.5%. Within the FAANG names, Alphabet (GOOGL) rallied 2.2% to 1,197.55.

The stock is close to surpassing a new handle on its nearly six-month chart pattern, a bullish double bottom. The double bottom features two sell-offs, and the second low must undercut the first low. If no handle forms, the typical buy point is 10 cents above the middle peak in between the two lows.

A New Uptrend Under Way?

While the Google search engine, AI and self-driving technology company has not been seen the triple-digit growth that it once saw soon after its 2004 IPO, it’s still showing solid growth as a megacap company.

In 2017, Alphabet grew profit by 29% to $35.90 a share as revenue rose 23% to $110.86 billion, eclipsing the $100 billion level for the first time.

The Street sees earnings climbing 23% to $44.28 a share in 2019.

Revenue has jumped 21%, 20%, 22%, 22%, 21%, 24%, 24%, and 26% vs. year-ago levels in the past eight quarters.

As seen in IBD Stock Checkup, Alphabet earns a top-notch A for SMR Rating, which stands for Sales + Profit Margins + Return on equity.

Alphabet is also highlighted in today’s IBD Stock Of The Day feature.

Top Growth Stock Breaks Out Early

Workday joined the Leaders list of Leaderboard as it moved further past an aggressive entry of 160.9

The daily and weekly charts of Leaderboard names are annotated by senior markets writers to flag critical buy points, timely sell signals, and instances of chart action that indicate unusual strength.

Fellow enterprise software names ServiceNow (NOW), Salesforce.com (CRM) and Ultimate Software (ULTI) all gained 1% or more.

Ultimate Software corrected sharply for two weeks but has rebounded fiercely. Still, its latest action is too narrow to qualify as a proper cup base.

The company’s earnings jumped 73% to $1.30 a share in Q2, the biggest year-over-year increase in at least 18 quarters. Revenue grew 21% to $276.8 million, a quarterly best.

On the downside, Broadcom (AVGO) dragged the fabless semiconductor industry group down. The large-cap designer and maker of many types of electronic chips gapped down more than 14% on a whale of volume following news that it’s buying the business software firm CA (CA). Analysts reportedly criticized the decision.

(Please follow Saito-Chung on Twitter at @IBD_DChung for more commentary on growth stocks, charts, and financial markets.)

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