Stock Market Piles On The Gains

The stock market sprinted toward its fourth weekly gain in a row, a win streak not seen in the Dow Jones industrial average and the S&P 500 since August.




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In August, the Dow and the S&P 500 rose for five consecutive weeks.

On Friday, the S&P 500 rose 1.2%, while the Dow Jones added 1.1%. The Nasdaq also added 1.1%. Small caps tacked on 0.9% in the Russell 2000.

Trade was up sharply. Options expire today, which often boosts volume.

Omega Healthcare (OHI) tried to clear a 38.44 buy point in a cup base but fell shy of the mark. Turnover was very weak, suggesting the long-term health care facilities REIT may need another stab at a breakout.

Omega is more of an income stock than a growth play. The annualized dividend yield is 6.9%. The dividend growth rate is 7%.

Five Below Adds Handle

Individual investors needn’t get too concerned about the scarcity of breakouts. Variety store retailer Five Below (FIVE) shows the type of action that investors should be watching closely.

The weekly chart shows Five Below began shaping its current base in mid-September. The base count had been up to four, but an undercut of the previous low reset the count at first stage.

Here is what gets interesting. Five Below has sketched a double-bottom base with a 125.85 buy point — not far off its current price just under 122. But the stock has added a handle, potentially offering an entry at 122.89.

The base is 36% deep but that may not be excessive in the context of the Nasdaq’s bear market decline of 24%. Growth stocks often decline more than the indexes.

IPO Arcosa

Initial public offerings is another space to watch. Infrastructure play Arcosa (ACA) has built a cup-with-handle base. The buy point is 31.10, just above its current price near 30. The IPO debuted on the NYSE on Nov. 1.

The energy and bank sectors have led the 33 sectors in price gains so far this year. Going into Friday’s session, energy was up 9.08% and the bank sector 7.62%.

Unorthodox Double Bottom

JPMorgan Chase (JPM) has built an unorthodox double-bottom base. The buy point is 113.02, about 8% above the current price near 104. What’s odd about the base? The pattern shows twin peaks in the middle of the pattern. Normally the double bottom has a single peak in the middle of the W-shaped pattern.

The Nasdaq and the S&P 500 showed similar twin-peak action during their declines.

Watch to see if JPMorgan can clear the buy area in strong volume.

On Friday, JPMorgan climbed above its 50-day line. The stock has not closed above the line in more than a month.

Oil Patch

Conventional bases are even more rare in the oil patch. Schlumberger (SLB) reported results in line with the Street’s consensus estimate.

The stock gapped up 7% to retake its 50-day line. Schlumberger is still 44% off its high.

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