Dow Jones Leads Advance As Stock Market Shows This New Bullish Twist

The current bull market in stocks today presented a new twist: banking shares regained some mojo on the backs of respectable quarterly results from the likes of JPMorgan Chase (JPM) and superregional PNC Financial (PNC). Wells Fargo (WFC) posted a solid 25% increase in Q1 earnings per share and even beat the Wall Street consensus view, but still fell hard amid ongoing turmoil at the C-suite level.




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Read more on the earnings results of Wall Street banks here.

Why is this significant?

Banks and S&Ls are currently cellar dwellers within IBD’s rankings of 33 broad industry sectors. See the full rankings in the IBD NYSE + Nasdaq research tables.

Sector rotation helps keep a bull market alive and kicking.

Meanwhile, Leaderboard stocks continued to flex outperformance. Many in the current list of 16 names show stout gains after clearing a proper buy point.

Recently added names are also in buy range or trading just below a proper buy point. They include real estate data analytics innovator CoStar Group (CSGP), political ad play Gray Television (GTN) and fast-growing business services firm Insperity (NSP).

At around 2:15 p.m. ET, the Dow Jones Industrial Average led the way up, rising almost 1%, even as beleaguered managed health care firm UnitedHealth (UNH) continued to tank.

UnitedHealth, a big winner since the major market bottom in March 2009, has lost support at its key long-term 200-day moving average. Shares have given back all gains from a breakout past a saucer with handle at 241.77 in May last year. It’s key to not allow nice gains to round-trip into a loss. The megacap is also well below its 50-day line. Such technical action suggests that a big new base is in the works.

The S&P 500, getting a big boost on renewed merger fever in the oil and gas industry, rallied 0.6% as NYSE volume was running higher vs. the same time Thursday.

Will The Energy Sector Also Boost The Stock Market Higher?

Anadarko Petroleum (APC) spiked more than 32% higher on a plan by global integrated oil and gas major player Chevron (CVX). Yet CNBC reported that Occidental Petroleum (OXY) may attempt to outbid Chevron’s $33 billion deal in an effort to quickly expand in hot U.S. shale oil and gas regions such as the Permian Basin of West Texas and eastern New Mexico.

The Nasdaq lagged Friday afternoon with only a 0.3% lift. However, at 7978, the tech-rich composite index now shows a 20.2% advance since Jan. 1.

Innovator IBD 50 (FFTY) made it three wins in a row and climbed 0.5% for its fifth gain in six sessions. At 34.40 and a 24.6% advance, FFTY is beating the Nasdaq. The S&P 500, at 2906, holds a 15.9% gain.

The Correct Buy Point With CoStar

According to IBD Leaderboard analysis, CoStar is holding above a 475.68 proper buy point in a special pattern first discovered by Investor’s Business Daily, the 3 weeks tight.

The proper buy range goes up to 499.46.

The 3-weeks-tight chart pattern offers an opportunity for growth investors to add a small amount of shares to a winning core position. Be sure not to add more than a tenth or an eighth of the original position. That way, you avoid getting “top heavy” in the overall stake.

CoStar is rising a rebound in the housing sector. The Washington, D.C., firm has posted marvelous fundamentals.

Earnings have risen four-fold from $2.04 a share in 2015 to $8.28 a share last year. Revenue picked up 23% to $1.19 billion in 2018, accelerating from a 15% year-over-year top-line gain in 2017. Institutional investors salivate when they find companies that deliver accelerating growth.

The Street sees CoStar’s earnings jumping 21% to $9.98 a share this year and another 18% to $11.75 in 2020.

IBD Stock Checkup shows the big cap holding a 99 Composite Rating on a scale of 1 (disastrous) to 99 (divine).

Charts Help Improve Results In Growth Stocks

IBD senior markets writers and editors annotate the daily and weekly charts of stocks on the Leaderboard “Leaders Near A Buy Point” and “Leaders” lists, as well as companies that make IBD’s most stringent computer-driven growth stock screen, Sector Leaders.

The charts of the top 10-ranking names in the IBD 50 also get annotated in real time to help investors spot a proper buy point, the right time to sell, and key moments of strength and weakness in the price-and-volume action.

Follow-on buy points and short-term sell signals also get annotated.

The gain, on a portfolio-weighted basis for stocks entering Leaderboard, is now 23.5% through Thursday’s close. Stocks that receive a full-position status are recommended to occupy one-eighth the funds of an all-cash portfolio devoted to growth stocks. A half-size position should take up one-sixteenth, or 6.25%, of the entire portfolio.

In Other Financial Markets

Crude oil continue to rally with vigor. WTI near-term futures rallied 0.8% to $64.08 a barrel, taking its year-to-date gain up to 41%.

Please follow Chung on Twitter at @SaitoChung and @IBD_DChung for more on growth stocks, breakouts, sell signals, chart analysis and financial markets.

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