Business Corpus: Apple, Nvidia Are Buys; Alibaba, Workday Lead 4 Top Stocks Setting Up In The Same Bullish BaseApple and Nvidia are in buy zones from double-bottom bases. Alibaba, Workday, East West Bancorp and RH are near breakouts in this bullish, W-shaped pattern. The post Apple, Nvidia Are Buys; Alibaba, Workday Lead 4 Top Stocks Setting Up In The Same Bullish Base appeared first on Investor's Business Daily.

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Apple (AAPL) and now Nvidia (NVDA) have broken out from shallow double-bottom bases. Chinese online sales giant Alibaba (BABA) and Workday (WDAY) are among the other top stocks moving toward buy points from the same bullish pattern.

East West Bancorp (EWBC) and RH (RH), formerly known as Restoration Hardware, are also forming double-bottom bases. These W-shaped patterns proliferates when the Dow Jones, S&P 500 index and Nasdaq composite fall and rebound furiously in several waves, which has occurred this year as investors worry over issues including the potential impact of a trade war with China.

The double-bottom base is a W-shaped pattern. The second leg of the W must undercut the first leg, shaking out weak holders. The middle of the W must be above the midpoint of the broader pattern. The buy point is 10 cents above the middle of the W. Sometimes a handle will form, creating a slightly lower or higher entry.

The recent crop of double-bottom patterns, including Apple, Nvidia and Alibaba, are relatively shallow. That reflects the fact that the stock market, while having some sharp moves, hasn't had a deep correction. The Dow Jones, S&P 500 and Nasdaq composite have all found support around their 200-day moving averages. The Nasdaq has reclaimed its 50-day line, with the S&P 500 and Dow Jones attempting to do so on Monday.

Apple

The Dow Jones industrial average component has seen its shares soar since announcing strong earnings and a huge stock buyback plan last week. Apple broke out on Friday after Warren Buffett disclosed that Berkshire Hathaway added 75 million shares to its stake in the tech giant in Q1.

Apple rose 0.9% to 185.42 on Friday, clearing a 7-week double bottom with a correct entry point of 179.04, MarketSmith analysis shows. On the stock market today, Apple hit a record 187.67 before paring gains to up 0.9% at 185.55.

Its relative strength line, compares a stock's price performance to the S&P 500, is at an all-time high, after a year of moving sideways.

The stock boasts a IBD Composite Rating of 91, putting it in the top 10% of stocks tracked.

Nvidia

Chip-designer Nvidia staged a breakout Monday after building a 7-week double-bottom base. This is key, as the minimum permitted duration for this base is seven weeks.

The stock jumped 4.4% to 249.53 on Monday, above its buy point of 239.35. Keep in mind that Nvidia is a late-stage breakout. Late-stage breakouts can work but are more prone to fail. Also, Nvidia releases Q1 earnings after the close on Thursday.

Nvidia's chips are used for PC gaming, artificial intelligence and autonomous driving. It has an impressive IBD Composite Rating of 94. It is ranked third in the Electronics-Semiconductor Fabless Group.

Alibaba

Shares in the Chinese e-commerce stock jumped 6.6% last week, including a 3.5% pop Friday on strong quarterly earnings. It has also received several price target increases.

Shares rose 3.1% to 194.83, with a double-bottom entry of 201.60. Its relative strength line is at an all-time high, while its IBD Composite Rating is an unbeatable 99.

The e-commerce giant maintained a long string of double-digit growth in revenue and earnings in its fiscal fourth-quarter report. That prompted Raymond James analyst Aaron Kessler to raise his price target on the China e-commerce leader to 250 from 240, with a strong buy rating.

Workday

California-based Workday is a cloud-based financial management and human capital management software vendor.

Its stock price is also seems to be heading for the clouds, as it has formed an 8-week double-bottom with a correct entry of 133.66. Shares were up 2.6% to 133.43. It managed to punch through its 50-day line, a key technical support last week.

Its IBD Composite Rating of 96 is a positive signals. The Earnings Per Share Rating is just 76, but Workday only recently became profitable and is showing strong growth.

East West Bancorp

The firm is the parent company of East West Bank, the largest independent bank headquartered in Southern California.

The stock has built a 14-week base, and is shooting for a buy point of 69.32. Shares rose 0.4% to 67.69 Monday.

The company earns the No. 20 rank among its peers in the Banks-West/Southwest industry group. People's Utah Bancorp (PUB), Plumas Bancorp (PLBC) and Western Alliance Bancorp (WAL) are among the top 5 highly rated stocks within the group.

RH

The furniture chain has been building a double-bottom base for the past 21 weeks.

It looks to be very much in the final stages of this consolidation, and is nearing its correct entry point of 105.56. Shares fell 2.1% to 98.71 on Monday.

While its IBD Composite Rating is below optimal at 83, its RS Rating of 94 and EPS Rating of 93 are impressive.

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The post Apple, Nvidia Are Buys; Alibaba, Workday Lead 4 Top Stocks Setting Up In The Same Bullish Base appeared first on Investor's Business Daily.