MercadoLibre Leads 5 Stocks Near Buy Points From This Classic Bullish Pattern

MercadoLibre is a stock that is setting up in a flat base.

MercadoLibre Leads 5 Stocks Near Buy Points From This Classic Bullish Pattern

MercadoLibre has a new flat base. It is one of many stocks that are just above or beneath the buy points in this classic bullish pattern.

Fortinet, Cadence Design Systems, Analog Devices and W.W. Grainger round out the list of five flat-based stocks.

Flat bases are most common after a run starts to cool. These flat bases can last as little as five weeks, and are no deeper than 15%. A stock's flat base indicates that it is resisted a major retreat.

After weeks of market inaction, the S&P 500 index and Nasdaq Composite reached 2023 highs. The uptrend is uneven.


Flat bases are usually, well, rather flat. FTNT is only just emerging from a flat V-shaped base. Last week, shares rose 2.7% to reach 69.63. This was just above the Friday buy point of 69.17. The current buy zone extends 5% beyond the point of purchase to 72.63.

FTNT shares jumped nearly 7% in May following Fortinet's strong earnings. Sunnyvale, Calif., cybersecurity firm Fortinet's first quarter earnings soared 79%, to 34 cents per common share. This was the fourth consecutive quarter that profits accelerated. The revenue jumped 32% to reach $1.26 billion. Fortinet's guidance was solid, but both companies exceeded expectations.

According to IBD Stock Checkup, Fortinet is the leader in the Computer Software Security Group and on the IBD 50 list for top growth stocks.

FTNT has a 99 Composite Rating. This score combines a variety of technical indicators to create a single, easy-to-read rating. The shares have a 99-point EPS rating, as earnings increased over the past four quarters by an average of 61.5%. Its relative strength is below mid-April's highs, and it has an RS rating of 92.

FTNT's stock price has risen by approximately 43% this year.

MercadoLibre is another IBD 50 member and the largest ecommerce company in Central America. It rivals, the industry giant. The company is also a major player in payments. The Buenos Aires-based company generates the majority of its sales in Argentina. The company's revenue grew by an average of 43.25% over the last four quarters. Its most recent period saw a 35% jump to more than $3 billion.

MELI's stock has risen by nearly 55% this year, after its earnings surged 457% in the first quarter and 205% for the second.

MercadoLibre, which had delivered strong results for the first quarter on May 3, initially rose, but then plunged dramatically, closing below 50-day line. The shares recovered that important level the following day, and quietly moved up.

MELI's stock price rose by 2.4% last week to 1,310.88. The stock finished its flat base with a buy point of 1,337.85 on Friday.

MELI has a perfect Composite Rating of 99 and a 96 RS rating.

According to IBD's Stock Checkup, Cadence Design Systems is the leader in the Computer Software Design category. CDNS is Thursday's IBD Stock Of The Day. It was also added to SwingTrader's list of short term trades.

CDNS soared above its 50 day moving average on Thursday in high volume after rival chip design firm Synopsys delivered a beat and raise report.

MarketSmith indicates that the current buy point is 217.27. CDNS offered a early entry on Thursday morning from the 50-day lines.

CDNS shares rose 7.7% this week to 216.71, briefly surpassing the official buy-point on Friday.

Cadence Design, a San Jose-based company in California, gave less-than-expected guidance on the current quarter. Cadence Design's outlook for the full year was more optimistic than expected.

CDNS stock is rated 96 on EPS and 98 on Composite. Its relative strengths line is below highs, and it has a Relative strength Rating of 93.

The stock market has soared by nearly 35% this year.

Analog Devices announced its Q2 results on Wednesday morning. The Wilmington, Mass. based company's earnings soared by an average of 50.8% in the last four quarters. Revenues grew from 79% to 21% during this period.

FactSet polled analysts who project that the company will release a new earnings per share (EPS) of $2.75, up 15% on a sales increase of 8% to $3.2 billion.

ADI is currently trading about 4% under the 198.35 base price, which is slightly above its April 4th all-time high. On May 17, shares surged over their 50-day line after reclaiming both their 10-day moving and 21-day lines.

ADI has a Composite Rating of 96 and a EPS Rating of 94. Shares have risen 16% in the past year.

W.W. Grainger, a leading provider of maintenance and repair products and services to manufacturers and government agencies. The company sells more than 1.5 million items, ranging from office chairs and HVAC units to light bulbs and painting equipment. Chicago-based company offers technical support, inventory management and other services.

GWW Stock is ranked No.1 among its peers in the Machinery-Tools & Related industry group. GWW stock is ranked No.

After two quarters in a row of earnings growth exceeding 30%, shares are up 23% year-to-date.

GWW is currently trading about 4% below the 709.31 purchase point. This is just slightly above its previous all-time high of 709.21, set in early March. Last week, the stock regained its technical lines and GWW is trading above its 10-day average.

W.W. Grainger’s has a 96 EPS rating.