As we emerge from the coronavirus chaos of 2020 and head into 2021, there is no shortage of stocks to watch trying to ring in the new year with a bang. Chegg (CHGG), JD.com (JD), Copart (CPRT) and Fortinet (FTNT) are just some of the names setting up for possible rallies.
The IBD Breakout Stocks Index highlights stocks in or near new buy zones or those that have recently broken out. In addition to Chegg, Copart and Fortinet, Pool (POOL), Tractor Supply (TSCO), Paycom Software (PAYC), Twilio (TWLO) and Match Group (MTCH) also earned spots on the index.
Stocks To Watch In Or Near Buy Zones
Some names on the IBD Breakout Stocks Index — such as Pinduoduo (PDD), Cloudflare (NET) and Varonis Systems (VRNS) — are extended and out of buy range. But other breakout index stocks have set up new chart patterns or entered new buy zones as 2021 comes into view.
Here’s a quick look at leading stocks to have on your radar.
Featured on the IBD Breakout Stocks Index on Dec. 18, Chegg is trying to retake the 90.09 buy point it initially cleared on Dec. 21. The Silicon Valley-based company provides digital textbooks and other education services via its network of online platforms, including Thinkful. Chegg is on the IBD Long-Term Leaders watchlist and IBD 50 list of leading growth stocks.
Chegg stock has pulled back below its buy point in below-average volume. Look for the stock to rebound and for its relative strength line to reverse course and head higher.
Like Chegg, Fortinet broke out then retreated. It cleared a 152.05 buy point on Dec. 22 before falling back in light volume. The stock is now trading just below the most recent entry.
Fortinet provides cloud-based and AI-driven network security. The company has generated average annual earnings growth of 47% over the last three years. Sales have also been solid and steady, ranging from 18% to 22% over the last eight quarters.
Like one of the salvaged vehicles it auctions off to insurance companies, Copart took a hit during the coronavirus crash. But boosted by a long track record of solid earnings and sales growth, the stock rebounded strongly, marking an all-time high in November.
Owned by 160 funds with an A+ rating from IBD, Copart stock is now working on a cup-shaped base showing a 131.06 buy point.
Along with Alibaba (BABA) and Pinduoduo, JD.com is among the top Chinese stocks to watch. The e-commerce giant is building a base as it tries recovers from its earlier failed breakout. JD stock jumped nearly 6% Tuesday, closing above its 50-day moving average.
While BABA stock tries to rebound from a sharp drop on news of an anti-monopoly probe by the Chinese government, JD.com stock is targeting a 92.87 buy point. Although its RS line has been lagging while shares consolidate, a breakout would mark an all-time high.
Breakout Stocks To Watch In 2021
As the pandemic-driven roller-coaster market of 2020 comes to an end, continue to track the IBD Breakout Stocks Index, updated every Wednesday.
Chegg, Copart, Fortinet, ServiceNow, JD.com, AMD, Match Group and Pinduoduo are just a few of the names you’ll find. Regularly checking the index, as well as the daily updates to other IBD Stock Lists, will help you stay on top of the best stocks to buy and watch.
IBD Breakout Opportunities ETF
The IBD Breakout Opportunities ETF (BOUT) from Innovator Capital Management tracks the IBD Breakout Stocks Index. As with other index ETFs, this allows you to essentially invest in the entire index in addition to or rather than buying individual stocks. Learn more about the ETF and Innovator funds.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
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