Banking

Banks, Weed Play Lead Five Stocks Near Buy Points

Your stocks to watch include bank stocks like Goldman Sachs (GS) and Capital One Financial (COF), as well as cannabis REIT Innovative Industrial Properties (IIPR), tech services firm Globant (GLOB) and specialty chemicals maker Element Solutions (ESI).




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Shares of those companies are all near buy points. Although some could offer early entries off their 50-day lines.

The relative strength lines are generally near highs, consolidating after solid uptrends. The RS line, the blue line in the charts provided, tracks a stock’s performance vs. the S&P 500 index.

IIPR stock and Element Solutions are both on the IBD 50.

Goldman Sachs Stock

Goldman Sachs eked out a 3% gain to 375.30, continuing to find support at the 50-day and 10-week lines. A strong bounce off the 50-day line could also offer an early entry in GS stock.

Goldman earnings beat second-quarter estimates on July 13. But trading revenue fell from the prior quarter, as markets settle down after pandemic-related gyrations. Shares touched a record high last month.

Many bank stocks have largely moved sideways recently as Treasury yields, which influence rates on things like mortgages, slip amid concerns about the coronavirus’ impact on the economic recovery. Cases have surged in recent weeks.

But as an investment bank, Goldman is less tied to interest rates than traditional banks.

GS stock has a strong 95 Composite Rating. Its EPS Rating is 93.

IIPR Stock

Innovative Industrial Properties, a real estate investment trust that serves the cannabis industry, is in a long cup base with a 222.18 buy point. IIPR stock rose 1.2% to 214.99 last week.

Innovative Industrial Properties owns more than 70 properties, like grow facilities and marijuana dispensaries, in states across the U.S. The company buys real estate from cannabis companies and leases it back to them. Those transactions give the companies an injection of capital when other funding sources are more difficult to come by because cannabis is still federally illegal.

As efforts to legalize or decriminalize cannabis on a federal level gain momentum, the company faces questions about its ability to attract business if access to banking and loans opens up for the industry.

The company reports second-quarter earnings on Wednesday. IIPR stock has a best-possible 99 Composite Rating and a 93 EPS Rating.

Capital One Stock

Capital One stock advanced 1% to 161.70 last week. COF stock is in a flat base with a 168.10 buy point, according to MarketSmith analysis.

The credit-card giant, which also handles consumer and commercial lending, has a 94 Composite Rating and a 72 EPS Rating.

Like some other bank stocks, Capital One has marched higher this year. COF stock hit a record high last month.

ESI Stock

ESI stock climbed 0.9% to 23.39 last week. Element Solutions stock is in a flat base with a 24.80 buy point. The flat base could be considered part of a base-on-base pattern, or even a base-on-base-on-base. A move off the 50-day line, perhaps above Thursday’s high of 24.11, could offer an early entry for ESI stock.

Element Solutions makes chemicals and coatings that appear in electronic circuitry, automobile systems, smartphones and packaging for things like water bottles and potato chips. Demand for consumer electronic products rose during lockdown, but the ongoing semiconductor shortage could hit its auto business.

The stock has a 98 Composite Rating. Its EPS Rating is 92.

Globant Stock

Globant stock edged up 0.6% to 239.16 last week. Shares were in a consolidation with a 244.82 buy point.

GLOB stock rebounded from its 50-day line on July 20, clearing short-term resistance and offering an early entry.

The tech-outsourcing company has a 98 Composite Rating. Its EPS Rating is 89.

The Computer-Tech Services group is ranked 13th out of 197 industries tracked by IBD.

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