Alphabet, Elbit Systems, Rollins, Agnico-Eagle Mines and Blackstone are some stocks to watch this week as the market faces the first real test of its uptrend.
The Nasdaq and S&P 500 gapped down sharply Friday, suffering their worst losses since April 21 and May 21, respectively. New tariffs on Canada, South Korea and other countries unnerved investors, who then got a June jobs report that was much weaker than expected.
Despite Friday's sell-off, the S&P 500 and Nasdaq remain in a power trend. Investors can buy stocks with a 21-day average true range (ATR) of up to 8%, though they should be wary of being too concentrated in high-octane names.
The average true range is a metric available on IBD's MarketSurge that gauges the characteristic breadth of a stock's behavior. Stocks with a high ATR tend to make large price moves that can trigger sell rules. Stocks with lower ATRs tend to make more incremental moves.
Some of today's stocks to watch have some resistance to economic downturns or are in high-demand fields.
Google Stock Tests Support
Alphabet shares fell along with the rest of the market Friday, but held above the 21-day line. The parent of Google and the Gemini AI app has dropped back into the buy zone from a breakout on July 14. The buy zone goes from the 181.23 buy point to 190.29. Investors also could treat the recent pullback as an alternate handle with a 197.05 entry.
The stock is down a fraction year to date after rebounding more than 40% from its April low.
The company is no longer growing at the high pace it did years ago, but it continues to be among the best in profit growth thanks to artificial intelligence and other growing businesses. In the company's second-quarter report, investors applauded the 32% revenue jump in the cloud computing business. Cloud sales of $13.62 billion beat estimates. Artificial intelligence-related workloads were a big driver of cloud revenue.
Among Alphabet's many other verticals is the Waymo autonomous driving taxi service. This week, Waymo said it will expand into Dallas next year in a partnership with Avis Budget Group.
Analysts remain bullish on Alphabet, with 82% of the 74 who cover the company giving it a buy rating, according to FactSet. The consensus earnings estimate for the full year is $9.82 a share, an increase of 22.1%. Sales this year are expected to climb 12.7% to $394.3 billion.
Alphabet's 97 EPS Rating is in the top five of 68 stocks in the internet content industry group, according to IBD MarketSurge.
Google stock has a Composite Rating of 95 and an ATR of 2.18%.
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Blackstone Among Stocks To Watch
Blackstone stock is forming a long cup-with-handle base with a 181.32 buy point. Shares fell 1.5% Friday and 4.3% for the week, but bounced off the 21-day moving average.
Shares are down about 1% year to date, but up more than 45% from the April low. Several up weeks in above-average volume since late June point to institutional demand for the stock. The Accumulation/Distribution Rating is A.
The stock has climbed back above its 50-day and 200-day moving averages as it now tries to emerge from a 42%-deep correction.
Blackstone is the world's largest alternative-asset management firm, with $1.2 trillion under management. Its three-year EPS growth rate is 17% and the three-year sales growth rate is 33%, according to IBD Stock Checkup.
The asset management firm's stock rallied July 24 after Q2 revenue and earnings beat analysts' estimates. The firm's credit and insurance business saw the fastest growth of Blackstone's four investment segments. About eight analysts raised their price targets after the report.
Blackstone suffered the death of one of its top real estate executives Monday, when a gunman fatally shot her and three others at a Manhattan office tower.
The stock has a 93 Composite Rating and an ATR of 2.55%.
Israel Defense Firm To Watch
Elbit Systems is forming a flat base with a 476.04 buy point ahead of its earnings report later this month. The stock is already above an early entry at the July 9 high of 458.83, testing that level on Friday.
Like some other foreign defense contractors, Israel-based Elbit is outperforming most U.S. defense giants. The stock is up 80% year to date. By comparison, GE Aerospace is up 62%, Huntington Ingalls 43%, RTX 36%, Northrop Grumman 25%, General Dynamics 18%, and Lockheed Martin is down 13%.
Elbit makes electronics and weapons systems for air, land and sea combat, including armored vehicles, drones and battlefield networks. It also makes protective systems, such as drone jammers.
The company is a major supplier to Israel's military, with 29% of sales in that country, per FactSet. Elbit says it has seen a "material increase" in demand from the Israel Ministry of Defense since the war against Hamas started in October 2023. Subsequent fighting against Iran and Hezbollah also boosted orders.
Elbit will report second-quarter results Aug. 13. Analysts expect earnings of $2.57 a share, an increase of 23.6% year over year. Sales are expected to climb 16.2% to $1.889 billion, per FactSet.
The stock has a Composite Rating of 98 and a 2.34% ATR.
Stocks To Watch: Agnico-Eagle Mines
Agnico-Eagle Mines broke out of a flat base on July 22 but has made little progress from the 126.65 buy point. Shares are slightly below the buy point, which can also be interpreted as the handle of a cup-with-handle pattern. The relative strength line is lagging the stock.
Wednesday, the Canada-based gold mining company topped analysts' expectations and reiterated 2025 guidance, but the stock remained muted. Sales increased 36% to $2.816 million while adjusted earnings jumped 81% to $1.94 a share in U.S. currency. Management cited firm gold prices and cost management.
The stock is up 60% year to date, thanks largely to the rally in gold. IBD's gold and silver mining group is No. 12 out of 197 groups.
Agnico-Eagle said in the earnings report it believed U.S. tariffs would leave the company "largely unaffected" because most of its gold is refined in Canada, Australia and Europe. That was before President Donald Trump raised the tariff on Canadian goods from 25% to 35% late Thursday.
The company is Canada's largest miner and the world's second-largest gold producer. It operates mines in Canada, Australia, Finland and Mexico. It also has development sites in Canada and Mexico.
Agnico-Eagle is one of 15 stocks in the gold mining industry with 99 Composite Ratings. Its ATR is 3.03%.
Rollins Another Stock To Watch
Rollins is also forming a flat base. The stock rallied July 24 after a mixed Q2 report, but the stock failed to breach the 58.65 buy point. Its RS line also is lagging, but has improved since the earnings jump.
The company's sales climbed 12% to $1 billion as earnings rose 11% to 30 cents a share. EPS met analysts' consensus estimate while sales were above expectations, according to FactSet. UBS, Morgan Stanley, Barclays and Piper Sandler raised their price targets on the stock following the report.
A Piper Sandler analyst said consumer demand remains strong, and June strength has continued into July. The second half of the year shows potential for acceleration in organic sales, while sales growth from acquisitions is trending above management's forecast of 3%-4% growth this year, TheFly.com reported.
Rollins is probably the largest bug killer in the world. It owns Orkin, Critter Control and many other insect and termite extermination companies in North America, South America, Europe, Asia, Africa and Australia.
The stock has a 96 Composite Rating and an ATR of 1.66%.
