Lithium battery stock Levant (LTHM), Chevron (CVX) and Northrop Grumman (NOC) ranks among the top stocks to watch this week, as they have performed close to the buy point in a challenging market. Valaris (VAL) and World Wrestling Entertainment (WWE) Cut.
Levant stock, a lithium producer and Tesla (TSLA) suppliers, and these other top stocks share two winning characteristics while the broader stock market is fresh below.
One, each weekly chart shows a relative strength line that creates bullish new heights. Two, each IBD composite rating is 90 or better until Thursday closes.
Investors should be cautious about making new purchases as the stock market continues to search for a direction. But it’s always a good time to make a watch list for the next uptrend.
IBD Live: A new tool for daily stock market analysis
Stock Market Action: See RS Line
In a weekly Marketsmith chart, RS lines for LTHM stocks and their peers reached new heights this week, indicated by a blue circle at the end of their RS line.
A rising RS line means that a stock is surpassing the S&P 500 index. The blue line in the chart showing this.
Relative power lines are a quick way to identify winners in any market – up or down.
The new high stock list is a great place to look for quality names with relative strength strong RS lines. Marketsmith, IBD’s stock research platform, has a screening tool that identifies stocks that have reached new heights along the RS line.
Composite rating wins
One of the best-possible 99 of the best growth stocks has a composite score of 90 or better. The IBD composite rating combines basic and technical metrics into a single easy-to-use score.
All the stocks to see this week meet that bar. Lithium battery stock with perfect composite rating of 99 for Levant and Chevron Lead each. They are followed by World Wrestling Entertainment 96, Valeris 92 and Northrop Grumman 90.
Tied to Levant stock lithium battery
Tesla battery supplier Levant has rallied in two of the past three weeks, recovering its 10-week moving average and then its 40-day moving average. This rally has taken LTHM stock to its highest level this year.
The rally saw Levant stock carved to the right of a messy cup-shaped base with 33.14 by points. Investors could use 29.68 – a dime above the May 5 high – as an offensive entry. LTHM stocks briefly topped the entry on Friday, then reversed as key indices fell to 2022 lows.
For now, lithium battery stocks are slightly below the initial entry and well below the traditional buy point.
But it deserves a stock watchlist: According to Marketsmith chart analysis, the RS line is reaching new heights for Levant stocks after a strong rally over the past two years. That energy index has also reached an all-time high, rising above the November 2018 high.
The LTHM stock chart will look better with some drastic measures, probably creating a real handle. Ideally, stocks give a buy signal as market conditions improve.
Levant stock shows an IBD relative strength rating of 96 out of 99. This means that in the last 12 months, it has exceeded 96% of the total stock in IBD’s database.
It is supported by a strong EPS rating of 75 out of 99. In early May, LTHM stocks rocketed after strong quarterly earnings and higher direction. Sales growth accelerated for a second quarter.
Earlier in November 2020, lithium stock rose in a supply deal with Levant Tesla. Since the adoption of electric vehicles has accelerated, several automakers besides Tesla are now trying to cut off the supply of lithium for EV batteries because of shortages.
Warren Buffett prefers Chevron stock, oil stock
Shares of oil major Chevron have rallied in recent weeks, reaching an all-time high after falling in late April. At the rally Chevron was made to the right of a flat base with 174.86 by points. On Monday Chevron briefly topped that entry, then returned to its 50-day line before rebounding before closing at 50 cents 167.88.
Nevertheless, the relative strength line of the CVX stock is setting a new high on the weekly chart. The RS line has risen higher this year as oil prices have soared to an eight-year high due to the Russia-Ukraine war. In fact, it is almost two years old, though it is below all-time highs.
Chevron has an RS rating of 98 and an EPS score of 78. Wall Street expects Chevron’s revenue to nearly double this year as sales increase 35%. Revenue growth has ranged from 70% to 179% in the last four quarters, an impressive rebound from the sinking in 2020.
Integrated energy giants like Chevron benefit from higher crude oil and natural gas prices, but also from sky-high refining margins.
Also bet on price investment legend Warren Buffett’s energy patch. In Q1, Warren Buffett greatly increased his stake in CVX stock Occidental Petroleum (Oxy).
Northrop Grumman stock gets lift to Ukraine
B-2 bomber Northrop Grumman offers a 477.36 buy point from a cup-with-handle base, formed after the stock peaked in March. Investors can use 463 as a low-slope trendline entry. They could also use 470.33, a dime above the May 5 altitude, as an alternative early entry.
At the moment, NOC stocks need to recover their 50-day and 10-week lines, down 2.1% from last week to 443.33.
Defense stocks have risen since Russia’s invasion of Ukraine in February in anticipation of higher defense spending by Western powers. On Wednesday, IBD chose NOC stock as its stock of the day because it is set up near a buy point.
The RS line is setting a new high on the weekly chart. It escalated after the February 24 invasion of Ukraine.
The stock has a 94 RS rating and a 69 EPS score of Northrop revenue and sales have declined in recent quarters, and according to Factset, some further weaknesses are expected in the third and fourth quarters of 2022 before growth returns.
Northrop Grumman is developing the next-generation intercontinental ballistic missile system in the U.S. Air Force, called the Sentinel.
Valeris stock has risen with the price of oil
Oil-and-gas drilling service provider Valaris has an upward trajectory, a particularly bullish pattern in a bad market, with oil prices at many-year highs. It stocked VAL on Thursday.
After a huge rally last year, Valaris stock is looking at 61.60 by points. Relative strength line has reached fresh heights with VAL stock, which is a sign of outperformance in the current weak market.
The stock fell 2.7% to 55.98 last week.
VAL stock carries a 99 RS rating and 61 EPS rating In its most recent quarter, Valeris increased losses by seven cents to 51 cents per share as revenue rose 4% to $ 318 million.
Analysts surveyed by Factset predict that Valeries will swing to 93 cents earnings in 2022 as sales will increase by 20%. In 2023, they project that Valaris revenue will be 350% vaults because sales growth will accelerate to 25%.
Valaris has a long-standing partnership with Saudi Aramco, the world’s largest oil producer. It is expected to benefit from Saudi Arabia’s expansion into the offshore market, which will create major demand for drilling services. Most of the country’s current oil and gas production comes from coastal mining.
World Wrestling Entertainment stock
Shares of Pro Wrestling Promoter have recently found support at a 40-week moving average.
WWE stock jumped 4.6% to 60.91 last week, just above its 50-day and 10-week lines. It is moving closer to 63.81 by points from a flat base, according to Marketsmith’s analysis. World Wrestling Entertainment stock is sitting on a downward sloping trendline. An increase in altitude above Friday’s intraday would suggest an early entry.
The relative strength line of WWE stocks shows a new high on the weekly chart. In fact, the RS line has risen to almost two-year highs, although it is well below its all-time high.
World Wrestling Entertainment has a 92 RS rating and a 98 EPS rating. The live entertainment giant has lost its most recent quarterly earnings expectations. In 2021, it topped $ 1 billion in annual revenue for the first time.
The return of live events after the epidemic hit, as well as streaming deals and international expansion, has strengthened WWE’s outlook.
For more great ideas like Lithium Battery Stock Levant, check out IBD’s proprietary watchlists, such as IBD 50 and IBD Big Cap 20.
You can like it too:
EV battery technology: a breakthrough
These are the 5 best stocks to buy and see now
Stocks to watch: Top-rated IPOs, large caps and growth stocks
Looking for the next big stock market winners? Start with these 3 steps
Don’t be fooled by the final hour rebound: the correction is getting worse