Stocks End Off Lightly; Can These 5 Growth Leaders Keep Winning?

X The major indexes, including the Dow Jones industrial average, refused to move far from the break-even line amid lackluster volume on Monday. Investors appear to be waiting for news later in the week that includes Thursday's scheduled congressional testimony by ousted FBI chief James Comey, the British general elections the same day and a European Central Bank monetary policy meeting.

Meanwhile, government bond prices didn't move much following data showing that wage inflation is still relatively tame. Unit labor costs in the U.S. came in at a revised gain of 2.2% in Q1, missing the Econoday consensus view of 2.6%. The yield on the 10-year U.S. Treasury bond was at 2.18%, still down sharply from a March 13% high of 2.62%.

The Dow Jones industrial average spent much of Monday's session in barely negative territory before finishing near 21,201, down about 0.1%. It rode gains of 1.3% and 0.6% in the prior two weeks. The S&P 500 ended Monday's session off 0.1%.

The Nasdaq was off less than 0.2%. Small caps, however, cooled off after solid gains last week. The S&P SmallCap 600, which throttled 1.7% higher last week, lost around 0.7%.

Losing industry groups included dairy product, generic drug, integrated telecom service, staffing, diversified operations and fiber-optic telecom gear, all of which slipped more than 1%. Leisure service, long-term medical care, wood product and paint stocks also fell 1% or more.

Some semiconductor plays showed some profit-taking. The chip sector is currently No. 1 among 33 groups for mid-to-long-term relative price performance. Chipmaker Analog Devices (ADI), which currently ranks No. 13 in the IBD Big Cap 20, staged a third day in a row of steep losses in heavy trade and dropped more than 3% to 78.50 in double normal volume. At its intraday low of 78.26, Analog triggered the loss-cutting sell rule for those who bought during last week's breakout past an 84.34 cup buy point.

Cup-without-handle bases tend to have a higher risk of failure. However, in Analog's case, a rest was already likely due since the stock initially broke out as early as July 2016, when it rallied past a 59.97 first-stage breakout.

From here, long-term holders should watch to see if the stock can find stickiness near its 50-day moving average. Another key price level is its recent low of 74.65.

Broadcom (AVGO), part of the fabless semiconductor industry group, fell nearly 1% to 252.21 in quick turnover, yet its overall uptrend remains unperturbed. The diverse chip supplier remains a true market leader due to outstanding fundamentals and excellent price action. Thus, investors may want to continue tracking the stock for potential new buy points.

Broadcom, which has grown its earnings per share by 19%, 29%, 38%, 51% and 46% in the past five quarters, currently holds a 10% gain after breaking out of a fresh flat base at 227.85.

Also worth watching closely are new IPO Canada Goose (GOOS), business and videoconferencing software expert LogMeIn (LOGM), Arista Networks (ANET) and Chinese social media giant YY (YY). The latter three are all members of IBD's Sector Leaders screen.

Canada Goose (GOOS), which specializes in high-end outerwear, soared nearly 4% to a new high of 22.50. The small-cap new issue, which went public at 12.75 a share in March, has now gained more than 21% since clearing a first-stage IPO base at 18.50.

Sales have grown magnificently in recent years (up 44% in fiscal 2015, up 33% in 2016, and up 39% to $404 million in FY 2017 ended in March), but Canada Goose's profit record is less exciting. FY 2017 profit fell nearly 19% to 94 cents a share, and the Street sees profit sinking an additional 62% to 36 cents a share.

However, despite the company posting on Friday a net loss of $1.02 a share in the just ended March fiscal fourth quarter, investors bid up the stock sharply.

Canada Goose trades on average 697,000 shares a day.

LogMeIn, in contrast, is in buy range after Monday's 1.9% decline snapped a five-day winning streak. At 111.85, the stock is up nearly 2% after clearing a 110.10 buy point in a shallow cup-like base on April 24.

Given that the provider of "Go To" family of web-based conferencing software products has pulled back mildly in recent weeks without touching its 50-day moving average, the post-breakout action for now seems normal.

Analysts surveyed by Thomson Reuters see second-quarter profit up an outstanding 90% to 93 cents a share, following excellent EPS gains of 40%, 22%, 22% and 143% in the prior four quarters. Top-line growth ranged from 16% to 135% over the same time frame.

Arista Networks, up more than 1% to 154.33 and new highs, continues to gain ground after clearing a 135.37 three-weeks-tight entry that became a four-weeks-tight pattern. These extremely narrow patterns allow investors to add a small amount to a winning position.

YY edged mildly lower to 59.05 and is feeling some upside resistance near 60. Gains are decent since the stock moved past a 56.31 cup-with-handle entry. The five-day handle began on May 16.

Be sure to look at both daily and weekly charts to spot well-formed handles. These provide a final shakeout of uncommitted holders, sending those shares into firmer hands.

See and read about all of the Sector Leaders names by going to "Stock Lists" at the home page of Investors.com. The daily and weekly charts of these leading issues also are annotated with analysis and proper buy and sell points at Leaderboard.

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