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Moody’s, CubeSmart Lead 5 Stocks Near Buy Points Showing This Bullish Trait


Moody’s (MCO) and CubeSmart (CUBE) lead this weekend’s watch list of five stocks all demonstrating resilience in a period marked by rotations of leadership and increasing volatility. Like CUBE and Moody’s stock, Nutrien (NTR) and Service Corp. International (SCI) have etched out base-on-base patterns.




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This is a stair-step formation, in which a second base follows closely on a prior base. A stock can’t rise more than 20% from the first base before starting the second one. In a a difficult, a base-on-base pattern can highlight stocks whose outperformance may have staying power. Instead of failing or breaking down, these stocks hold near highs and try to push on.

The fifth stock in the this weekend’s watch list, Raymond James Financial (RJF), is exhibiting a similar trait, but doesn’t quite have the look of a base-on-base pattern.

CUBE stock is part of the flagship IBD 50 list of elite stocks. Nutrien is part of the current SwingTrader portfolio, which aims to capitalize on market swings and pile up modest gains.

While these stocks have shown resilience in recent weeks, stock market conditions remain difficult. Investors should be cautious about any new buys.

Be sure to read IBD’s The Big Picture column after each trading day to stay on top of the prevailing market trend and what it means for your trading decisions.

Moody’s Stock

Both sides of Moody’s business have been thriving, growing by double digits lately. Its bond ratings business has been fueled by surging issuance of leveraged loans amid strong M&A activity and refinancing. A massive “refunding wall” in coming years provides some stability for future demand.

Meanwhile, Moody’s Analytics is successfully tapping into demand for insight into cybersecurity risk and management of ESG and climate policies.

Moody’s stock cleared a 388.91 buy point on Oct. 26, but pulled back after a modest run-up. But MCO stock found support at its 50-day line and is working on a flat base with a 408.04 buy point, which is really a continuation of the prior base.

Moody’s stock slipped 0.6% to 393.64 on Friday and is about 4% below a buy point. A move above the Dec. 16 high of 400.73 would offer an early entry, clearing some short-term resistance. MCO stock has an excellent 96 IBD Composite Rating, a single score that combines both technical and fundamental factors.

CUBE Stock

CubeSmart is a real estate investment trust that plays in the booming self-storage industry. Higher rents and high occupancy contributed to 15.6% growth in same-store revenue for CubeSmart in Q3. Funds from operations, the equivalent of EPS for REIT stocks, surged 27% in Q3. That compares with more typical FFO growth of 3% for all of 2019.

FFO and revenue growth have both accelerated for five straight quarters.

While pandemic disruptions helped ignite demand for self-storage, continued strength keeps surprising Wall Street. That’s partly because there’s less turnover of customers. The work-from-home trend created more sustainable growth via decluttering. Rising real estate prices also have families settling for less on-site storage space and more off-site.

CUBE stock gained 2.3% to 55.79 on Friday, closing in on a 56.74 buy point from a flat base. That buy point is just a stair-step above the prior base’s 55.17 buy point. A move above the Dec. 8 peak of 56.05 would offer a slightly earlier entry.

REITs are often defensive plays that do well when Treasury yields are falling, making their dividend yields look more attractive. CUBE stock boasts a 3.1% yield. If Treasury yields rebound significantly, REITs could lag. But, as noted earlier, CubeSmart and other storage REITs are enjoying solid and even accelerating growth.

CUBE stock’s relative strength line, the blue line in the charts provided that tracks its progress vs. the S&P 500, is right near a multiyear high. That’s another indication of leadership potential.

NTR Stock

Nutrien, the Canadian producer of potash and nitrogen fertilizer, has been a huge roll amid tight supplies and strong demand. Chinese export curbs and high natural gas prices have supported fertilizer prices.

In Q3, Nutrien earnings exploded 500% to $1.38 per share as revenue grew 43% to $6.02 billion. Positive industry fundamentals are expected to last into 2023.

NTR stock is working on a 73.60 flat-base buy point. On Friday, NTR stock closed off 0.8% at 70.84. The low point of the current base ever so slightly dipped below the prior 66.03 buy point.

NTR stock boasts an excellent 99 IBD Composite Rating.

SCI Stock

Service Corp. International, which manages cemeteries and provides funeral services, has been on a strong run amid unexpectedly high mortality due to the pandemic. The aging population and strong household finances also have fueled sales of burial space in advance of their need.

While Service Corp. has said it expects some payback, with lower mortality in 2022, its stronger financial profile should contribute to earnings via lower debt costs and stock buybacks.

SCI stock slipped 0.8% to 67.87 on Friday, just 3% below a 70.13 flat-base buy point.

RJF Stock

The bull market has been great for Raymond James. Data through October showed assets under management up 32% from a year ago to $199 billion. Assets under administration grew 33% to $1.2 trillion.

But that’s not all the investment bank and asset management firm has going for it. The number of financial advisors, independent contractors really, working on the Raymond James nameplate has surged. Dealmaking activity has been brisk, including a $1.1 billion deal for TriState Capital in October, which should buttress corporate strengths and earnings.

As long as the stock market and economy hold up, the good news should continue.

RJF stock initially rallied after the Fed meeting on the prospect of higher rates, but lost ground on Friday, slipping 1.6% to 97.38, just below its 50-day line. That leaves RJF stock about 6% below a 103.56 buy point. The current base is modestly above a prior base that initially failed.

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