Expanding its artificial intelligence reach with automotive and robotics initiatives at CES 2025, Nvidia (NVDA) has weathered recent volatility by breaking out to yet another record high Tuesday before reversing lower. Nvidia stock spearheads a barrage of names on the Investor’s Business Daily Breakout Stocks Index in or near new buy zones, including GE Vernova (GEV), Birkenstock (BIRK), Interactive Brokers (IBKR) and more.
As the recommended market exposure level gets cut to 40%-60%, certain indicators serve as reminders for investors to stay vigilant about following rules for how to buy stocks and when to sell stocks in this environment. Here are three telltale signs to watch.
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How To Invest In Nvidia And Beyond In 2025: Draw Lines, Not Conclusions
1. Monitor Breakouts For Nvidia Stock And More
The strength — or weakness — of breakouts in leading growth stocks provides an important clue as to how robust or tepid a markup uptrend is.
In addition to Nvidia and GE Vernova, several members of the IBD Breakout Stocks Index have launched new moves. IBD 50 stock and IPO Leader Klaviyo (KVYO) jumped past a 41 buy point toward the end of last year.
But Nvidia, GE Vernova and Klaviyo have run into post-breakout pressure. Nvidia fell over 6% Tuesday after briefly clearing a 152.89 entry in a late-stage base. Such formations have more risk and tend to be more volatile than first- and second-stage patterns.
But on Wednesday, Nvidia continues to hold support at its 50-day line, keeping it within its buy zone. After breaking out on Monday, GE Vernova is now trying to hold its 357.09 buy point while Klaviyo clings to support at its 21-day line.
Meanwhile, Birkenstock, Interactive Brokers, CBIZ (CBIZ) and Disney (DIS) are among those entertaining fresh breakouts. If these and other IBD Breakout Stocks Index members do break out, look for strong volume before and after to show conviction for a sustained climb.
See Who Joins Nvidia On The IBD Breakout Stocks Index
2. Watch Action Around Key Moving Averages
To gauge technical strength in the market indexes and individual stocks, monitor the action around key moving averages like the 21-day, 50-day and 10-week lines.
The Nasdaq fell back below its 21-day exponential moving average on Tuesday after bouncing back above it on Monday. The index remains above that line early Wednesday.
Nvidia stock offers timely points regarding these lines as well. The AI leader retreated from the 152.89 buy point, barely holding support at its 50-day moving average on Tuesday. Nvidia is so far holding that line on Wednesday. Keep an eye on the 21-day exponential moving average, which has fallen below the longer-term 50-day benchmark, a sign of technical weakness.
Birkenstock — featured in the IBD Stock Analysis on Friday — has held support at its 21-day line as it forms a first-stage cup with handle showing a 62.45 entry. Showing improving technical health, the iconic sandal maker’s 50-day line has started cross back above the 200-day moving average.
As Interactive Brokers looks to clear a 193.42 buy point, it already trades solidly above its 21-day and 50-day moving averages. Providing another noteworthy clue, its relative strength line has hit a 52-week high, earning a coveted blue dot in MarketSurge.
So while looking for the best stocks to buy and watch, keep an eye on these telltale moving averages to see where stocks are finding support or hitting resistance.
3. Keep An Eye On Distribution Day Count
Monitoring the health of the market indexes is one of the key pillars of The IBD Methodology. And an important part of that is watching the distribution day count on the Nasdaq and S&P 500. The count is updated daily inside The Big Picture column.
A distribution day is essentially a day of heavy selling in the indexes, defines as when the S&P 500 and/or the Nasdaq falls more than 0.2% in higher volume than the previous day.
As of Tuesday’s close, the distribution day count stands at a relatively high eight on the Nasdaq and six on the S&P 500. When distribution days start to mount, it points to building pressure in the broad market and the increasing likelihood of an extended pullback.
After ending 2024 up 28.6% for the year, the Nasdaq flashed five straight down sessions from Dec. 26 to Jan. 2.
After holding its ground at the 50-day moving average on the first trading day of the new year, the tech-heavy Nasdaq rang in 2025 with two strong up days, led by strong gains for Nvidia stock and other Magnificent Seven names like Meta Platforms (META) and Alphabet (GOOGL).
But on Tuesday, the Nasdaq retreated, falling below its 21-day line. The index, which remains above its 50-day line, has encountered resistance at the 20,000 mark after briefly eclipsing it in mid-December.
So as 2025 gets underway, monitor leaders like Nvidia in conjunction with the performance of the market indexes. Using indicators like the distribution day count and support and resistance at key moving averages will help investors stay profitable and protected in the year ahead.
IBD Breakout Opportunities ETF
The IBD Breakout Opportunities ETF (BOUT) from Innovator Capital Management tracks the IBD Breakout Stocks Index. As with other index ETFs, this fund allows you to invest in the entire index in addition to, or rather than, buying individual stocks. Learn more here about the ETF and Innovator.
Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
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