These 5 IBD 50 Stocks Are In Trouble

As the stock market takes a breather, a few IBD 50 stocks have come off their perch. Is it time to sell these wobbly leaders?

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A look at their charts shows that in some cases, there are clear sell signals.

PDD Holdings (PDD) climbed as much as 15.7% from a 142.32 handle buy point, but the stock is now below that entry.

This is a pretty clear-cut case of a sell signal, namely a round-trip of gains from the breakout. The stock is testing the 10-week moving average. If it can bounce off the line, a new buy opportunity could emerge.

China-based PDD still possesses outstanding fundamentals that could make it a good investment choice later on. Earnings per share swelled 28%, 31%, 102% and 185% the past four quarters, largely on the strength of its Temu online shopping app.

Sales growth accelerated 35%, 46%, 54%, 89%, 117% and 119% the past six quarters. And analysts expect a robust current quarter, according to IBD MarketSurge.

Stock Market Leaders In Trouble

AeroVironment (AVAV) had an awful sell-off Thursday and Friday, losing more than 14% in that two-day rout. Shares have almost wiped out a 21% gain from the 184.61 buy point, and investors who bought at that entry should sell before all gains are gone.

The stock is testing the 10-week moving average. Support could emerge at this level, although it may be difficult to get a rebound following the week’s intense selling.

Also, keep in mind that AeroVironment will report earnings on Wednesday after the close. Analysts expect earnings to drop 78% to 21 cents a share on a 1% increase in sales to $188.6 million, according to FactSet.

The company makes drones and other robotic weapons systems. Its Switchblade drone can stay airborne for 40 minutes until it finds a target and dives into it with an explosive warhead.

Comfort Systems (FIX) slid more than 3% on the stock market Friday and is back below its 50-day moving average. While it’s possible that the air conditioning and heating services company will form a base, shares are having a hard time staying above the 50-day line.

The relative strength line is trending lower, too. So while there is no clear sell signal for Comfort Systems, shareholders should watch out for a deeper decline below the 50-day average.

Sellers Hit On, Oscar Health

On Holding (ONON) gapped down in heavy volume Friday. The stock is holding above its 50-day line. Yet, this was the largest drop since the breakout, in one of the highest-volume days. That’s a sign to take at least some profits.

Oscar Health (OSCR) fell below the 50-day moving average the past week, in what can be deemed a sell signal. The provider of health insurance had already given up a 26% gain from a breakout at 18.55. This made for a round-trip sell signal, which appeared about two weeks ago.

The stock was removed from the IBD 50 with Thursday evening’s update. Oscar Health broke a string of losses with a profit in the first quarter. Although analysts expect another profit in the current quarter, the road ahead seems bumpy, with losses expected in the third and fourth quarters of this year, according to MarketSurge.

The flip side is that most IBD 50 stocks are holding up well after artificial intelligence players and other market-leading stocks faced profit-taking the past few days.

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