Dow Jones Futures: Microsoft Stock, Adobe Stock, PayPal Stock, Salesforce Stock Near Buy Points

Dow Jones futures rose solidly late Wednesday, along with S&P 500 futures and Nasdaq futures, after the Dow Jones and other major averages rallied in Wednesday’s stock market but closed poorly. Software makers Microsoft (MSFT), Adobe (ADBE), Salesforce.com (CRM) and digital payments leader PayPal (PYPL) are all just below buy points. Adobe, which reports earnings Thursday, has a best-possible 99 IBD Composite Rating. Dow Jones component Microsoft stock, Salesforce stock and ServiceNow stock have 98 Composite Ratings. PayPal stock has a  97 CR.

All-time stock winners often have an IBD Composite Rating of at least 95 near the start of their big run.

Adobe stock, ServiceNow and PayPal are all in the IBD 50 list.

Dow Jones Futures Today

Dow Jones futures rose 0.45% vs. fair value. S&P 500 futures were up 0.4%. Nasdaq 100 futures climbed 0.55%. Remember that Dow futures and other overnight action don’t necessarily translate in actual trading in the next regular session.

Stock Market Rally: Yes, But…

Wednesday was another “yes, but” stock market rally. Yes, the Dow Jones rose 0.6%, the S&P 500 index 0.5% and the Nasdaq composite 0.95%. But they closed well off the day’s best levels and essentially at post-open lows. Many leading stocks closed weak as well.

The stock market remains prone to big intraday swings. The major stock market averages are well off their Dec. 3 peaks, let alone their late September or early October all-time highs. The key indexes are all below their 50-day and 200-day averages.

Investors should be cautious. If you are in cash, stay engaged with the market and keep your watch list current. If you do invest, try to buy as close to the entry point as possible. Consider taking a partial position at first, filling out your holdings if the stock rises more in the buy zone.

Microsoft Stock

Microsoft rose 0.45% to 109.08 on Wednesday, closing almost at session lows. Shares are 4% below a 113.52 handle in a double-bottom base. Technically, the original 112.34 buy point above the middle of the “W” didn’t fail, but the handle appears to be a clearer resistance point now.

The relative strength line, which tracks a stock’s performance vs. the S&P 500 index, is at a record high. Microsoft stock’s RS line never fell too far during the stock market correction or misfiring rally attempts.

Microsoft has been growing rapidly in cloud computing, fueling three quarters of modestly accelerating revenue growth.

Adobe Stock

Adobe stock faded to rise just 0.1% to 245.55, though that was just enough to get back above its 50-day line. Shares are 6% from a 260.82 handle buy point. Though Adobe stock is still off its mid-September peak of 277.61, the RS line is just below new-high ground.

Adobe is in a late-stage base. Breakouts from late-stage patterns are more apt to fail.

Adobe earnings are due late Thursday. Analysts expect Adobe earnings per share to rise 49% to $1.88 with revenue up 20% to $2.424 billion. That would be the third straight quarter of Adobe earnings growth deceleration and the smallest sales gain in nine quarters.

Salesforce Stock

Salesforce stock rallied 2.4% to 140.09, back above its 50-day line after hitting resistance earlier in the week. Shares are within 5% of a 147.17 cup-with-handle entry. Unlike with the other top stocks cited here, Salesforce’s RS line is a bit off record highs, though it’s already above the handle high.

Salesforce stock surged 10% on Nov. 28 following strong quarterly results and guidance. The Salesforce earnings report was among the first of a flurry of upbeat software results.

PayPal Stock

PayPal stock is working on an 88.94 handle buy point handle, rising 1.2% to 86.50 on Wednesday. The RS line for PayPal stock is hitting new highs. PayPal was Tuesday’s IBD 50 Stocks To Watch pick.

ServiceNow Stock

ServiceNow stock advanced 2.3% to 187.64, about 2% below a 192.26 buy point from a handle in a double-bottom base. You could use 194.14 as the entry from above the middle of the “W.” The RS line for ServiceNow stock is at highs.

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