Still feeling the clutches of this year’s bear market, tech stocks Alphabet (GOOGL), Microsoft (MSFT) and Nvidia (NVDA) again failed to regain a spot on the latest list of new buys by top mutual funds. But Apple (AAPL) made a triumphant return after a two-month absence. It tops the list, attracting more than $1.7 billion from top fund managers.
But stocks in the medical sector once again largely dominated this monthly-updated stock screen. Including three companies in the field of medical software, 40 stocks related to the medical industry are emerging.
Pfizer (PFE) ($1.4 billion) and Eli Lily (LLY) ($1.3 billion) joins AAPL stock in the billion-dollar club. UnitedHealth (UNH) ($952 million), AbbVie (ABBV) ($818 million) and Elevance Health (ELV) ($810 million) fall a little short of that elite status.
Among the energy values, Exxon Mobil (XOM) ($1.6 billion) leads. Semiconductor equipment manufacturer KLA (KLAC) also earns a seat at the table, taking in about $1.2 billion from top mutual funds.
NVDA, MSFT and GOOGL again failed to make the cut. But the presence of Apple and the KLA hints at a late rebound in tech stocks. Additionally, Nvidia, Microsoft, and Alphabet all picked up some key moving averages.
New investments by top mutual funds in stocks like Analog devices (ADI), ON Semiconductor (ON), Synopsis (SNPS), CDW (CDW) and Cadence Design Systems (CDNS) further indicate a booming technology sector.
Note: Be sure to check these Excel files, updated and released monthly, to see all the stocks on the latest new buys list and new sells list by top mutual funds.
Create custom stock screens to find stocks that meet your own criteria
The Best Eye Stocks Mutual Funds Setting Up
Risk management is the key to long-term success in the stock market. And managing risk, especially in volatile times, means staying focused on the basics of stock investing.
First, stay in tune with market trends since most individual stocks follow the direction of major stock indices. Second, understand the story behind the stock. Look for companies whose innovative products generate strong growth in profits and sales. Finally, use the relative strength line, moving averages, and price and volume action in the stock chart to gauge demand. The biggest money is made – with the lowest risk – when all of these elements line up and a stock charts and breaks out.
Now apply this approach to stocks on the new buy list of top mutual funds.
AAPL stock, for example, broke out of its bear market trough, regaining its 40-week moving average. While its 10-week line remains below the 40-week benchmark, the 10-week line has started to rise. A sign of market leadership, Apple’s relative strength line has already hit a new 52-week high as it continues its rebound.
With oil and gas stocks leading the market this year, XOM stock hit a new high in June before falling back. The energy giant is building further consolidation, but slipped below its 50-day line in large volumes despite strong profit growth on July 29.
Chevron (CVX) is showing somewhat similar action while also generating explosive EPS gains over the past few quarters. CVX stock also failed to find support on its 50-day line. The latest action from CVX and XOM is reflected in recent weakness in ETF Energy Select Sectors SPDR (XLE).
More stocks to watch in or near buy zones
Volatility, inflation and geopolitical uncertainty remain. But the return to strength of AAPL and other tech stocks — along with an expansion of names on the latest list of new buys by top mutual funds — bodes well for the market.
KLAC stock broke a buy point of 372.44 in a double bottom, a common chart pattern in volatile environments. ON Semiconductor also etches a breakout from a double bottom.
With House Speaker Nancy Pelosi’s visit to Taiwan and other hotspots around the world making the news, major defense actions are also looking to secure further escapes. Transdigm (TDG) put a buy point of 633.44, also from a double bottom, in its sights. Heico (HEI) flew into a buy zone. Meanwhile, L3Harris Technologies (LHX) and Lockheed Martin (LMT) recovered their 50-day lines.
Retail inventory in or near new buy zones includes Costco (COST), dollar tree (DLTR) and General dollar (DG).
Medically, UnitedHealth, Vertex Pharmaceuticals (VRTX) and Eli Lilly are among many stocks testing new breakouts and buy zones.
This is just a small sample of all the names on this month’s new buys list by top mutual funds. Many are settling as a new uptrend takes hold.
Be sure to check out the Excel listing in this article to see stock quotes and stock charts for each company you’re interested in.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
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