As the stock market gyrates, one IBD investing metric to watch is a rising relative strength line. Technology companies CyberArk Software (CYBR), ServiceNow (NOW), Workday (WDAY), Keysight Technologies (KEYS), and ResMed (RMD) all have relative strength lines at new highs amid worries that a new bear market is at hand.
XThe relative strength line tracks a stock's performance vs. the S&P 500 index. Enterprise software maker Workday sports a relative strength of 97 out of a possible 99. Security software maker CyberArk also has a relative strength of 97, while ResMed is at 93.
ServiceNow, also a member of the Computer-Software Enterprise group, chimes in at 92 as does telecom test gear maker Keysight.
What accounts for an outperforming relative strength line? It could be a mix of a company's fundamentals, such as earnings or sales growth, as well as the outlook for the sector.
Acquisitions Rife In Enterprise Software Stocks
In the case of CyberArk, spending to thwart hackers remains a top priority of corporate tech departments. Chief information officers, meanwhile, also are prioritizing digital transformation projects. That's a plus for ServiceNow and Workday.
And, acquisitions have been rife both in the software-as-a-service market and in cybersecurity.
Keysight, some analysts say, could get a lift as telecom companies buy testing gear for new 5G wireless networks. Sleep device maker ResMed is broadening its product lines. In early December, ResMed acquired Propeller Health, a Wisconsin-based maker of digital inhalers.
Appropriate Entry Points
While a rising relative strength line is a bullish signal, before you buy make sure the stocks are forming proper bases and are hitting appropriate entry points.
Amid the stock market volatility, Workday is trading just above a technical buy point of 157.12. ResMed is about 4% below an entry point of 116. ServiceNow is 12% below a buy point of 206.29, while CyberArk is 13% below its entry point.
CyberArk stock climbed 1.1% to close at 73.27 on the stock market today, while ServiceNow stock on Friday rose 1.2% to 180.33. Workday stock edged 0.7% higher to 159.56. Keysight stock advanced 1.1% to 60.13. ResMed stock was up 0.8% to 112.04.
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The post These 5 Tech Companies Strut Rising Relative Strength Amid Bear Market appeared first on Investor's Business Daily.
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