Labor Day Stock Sale: Tesla Leads Top 5 Stocks Nearing Buy Points

We turn our attention to five noteworthy S&P 500 stocks: Tesla (TSLA), Baker Hughes (BKR), General Electric (GE), Toll Brothers (TOL), and Samsara (IOT). Despite a mixed trading session on Friday, the stock market ended the week on a strong note, with these companies displaying promising potential in a confirmed uptrend.

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Tesla (TSLA): Accelerating in New Directions

Tesla made headlines on Friday by introducing its upgraded Model 3 in China and reducing prices by nearly 20% on its high-end Model S and Model X vehicles in the U.S. Furthermore, Tesla trimmed the price of its Full Self-Driving system from $15,000 to $12,000. Although these announcements initially had a negative impact on TSLA, resulting in a 5.1% decline to $245.01 during Friday's trading, the stock still managed to close the week with a 2.7% gain.

For potential investors eyeing Tesla, it's worth noting that the stock is currently trading close to its 50-day moving average and its 21-day line. An entry opportunity for more aggressive investors could emerge if TSLA surpasses Thursday's high of $261.18. According to MarketSmith, Tesla has recently formed a new base with a valid buy point at $299.29.

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In the IBD automaker industry group, Tesla secures the fourth position and boasts a Composite Rating of 95 out of 99, an 84 Relative Strength Rating, and an EPS Rating of 93 out of 99.

Toll Brothers (TOL): Building Prosperity

Luxury homebuilder Toll Brothers experienced a 2.3% increase to $83.83 on Friday, clearing a buy point. Throughout the week, Toll Brothers stock surged by an impressive 8.3%. It's important to note that TOL shares had previously reclaimed the 50-day line earlier in the week.

Currently, Toll Brothers stock is trading just above a flat base buy point of $83.72, as indicated by MarketSmith. Homebuilders have been performing exceptionally well this year, with rising interest rates driving demand and elevating prices for newly constructed homes. The broader IBD Building-Residential/Commercial industry group has also demonstrated strong performance in 2023, with a collective gain exceeding 43%.

On August 22, Toll Brothers reported better-than-expected fiscal third-quarter earnings and revenue, buoyed by increased home deliveries and surging unit prices. The company foresees a continued rise in new home prices for the remainder of the year, aligning with trends in the housing market.

In the housing market industry group, Toll Brothers secures the third position and possesses a robust Composite Rating of 98 out of 99, a 96 Relative Strength Rating, and a 97 EPS Rating.

Baker Hughes (BKR): Powering Ahead in Oil Services

Baker Hughes, a leader in oil field services, achieved a 1.7% gain to $36.81 on Friday, contributing to a 4% weekly advance. Over the past five weeks, BKR stock has maintained a tight trading range and surpassed a buy point of $36.48 on Friday.

Investors had the opportunity to identify an early entry point at $35.62, which can also be interpreted as a handle to a more extended consolidation. BKR stock has demonstrated remarkable gains of around 30% for the year.

Baker Hughes' performance aligns with the strong showing of the IBD-tracked Oil & Gas-Machinery/Equipment industry group in 2023, with gains exceeding 27% year-to-date. The company's earnings and revenue growth have outpaced analysts' estimates over the past two quarters, reflecting its resilience in the market.

BKR stock experienced a breakout as U.S. oil prices soared above $85 a barrel on Friday, reaching a high for 2023. The stock boasts a Composite Rating of 99, a Relative Strength Rating of 92, and an EPS Rating of 91.

Samsara (IOT): Soaring on Strong Q2 Performance

Software developer Samsara experienced a remarkable surge of just over 13% to $30.93 on Friday, driven by second-quarter results that exceeded Wall Street expectations. Throughout the week, IOT shares soared by more than 22%, breaking out of a double-bottom base with a buy point of $29.79.

While IOT stock remains within its buy range from the entry, it's currently trading 18% above its 50-day line. Investors may consider monitoring Samsara for a few more days to ascertain if the momentum persists.

For the quarter ending July 29, Samsara reported a profit of 1 cent per share on an adjusted basis, a significant improvement compared to the 4-cent loss during the same period the previous year. Revenue also experienced substantial growth, rising by 43% to $219.3 million, surpassing analysts' projections.

Samsara's positive quarter in adjusted free cash flow underscores its promising financial position. The stock holds a Composite Rating of 96, a Relative Strength Rating of 98, and a 71 EPS Rating.

General Electric (GE): Revving Up for Growth

General Electric stock experienced a minor decline of 0.2% to $114.24 on Friday, although it still achieved a 2% weekly gain. The stock is currently forming a tight flat base with a buy point of $117.96. This marks the first valid base for General Electric stock since January.

In 2023, GE stock has surged by approximately 72%, surpassing many other stocks and reaching a five-year-plus high. On July 25, the company delivered a robust quarterly report, with improvements evident across its aerospace, gas power, and renewable energy segments. GE's aerospace segment, often referred to as its "crown jewel," has played a pivotal role, contributing to the stock's impressive earnings growth.

General Electric has consistently demonstrated its resilience, with an average earnings growth of 40% over the past four quarters. Analysts anticipate EPS to grow by 104% in Q3 to 55 cents per share.

The stock holds a Composite Rating of 92, a Relative Strength Rating of 96, and a 76 EPS Rating.

As the trading week unfolds, these five stocks offer enticing opportunities for investors across various sectors, potentially promising growth in the post-Labor Day market.

Also Read: September Stock Market Forecast: Potential Surprises Ahead - AI, Cash, and Apple in Focus