Blue Chips Lead Market; DowDuPont, IBM Surge | Stock News & Stock Market Analysis

Blue chips led the pack midday Thursday, as the Nasdaq gave back part of its early gains. Volume was up on both major exchanges.

X The Nasdaq gripped a 0.2% gain after being up 0.5% early in the session. Meanwhile, the Dow Jones industrial average was up 0.5% at midday. The S&P 500 rose 0.4%, while the small cap Russell 2000 was flat.

Two stocks in the 30-component Dow Jones industrial average showed especially good action. DowDuPont (DWDP) broke out of a 10-week flat base. The stock rose 1.63 to 74.68, crossing above a 73.95 buy point. Volume was about 10% above average.

DowDuPont will report Q4 results before the market’s open Feb. 1. The Street expects earnings to fall 33% to 66 cents a share. For the full year 2017, analysts estimate earnings will edge up 1%. In 2018, earnings are expected to surge 25%.

Another Dow stock, IBM (IBM) popped 3.48 to 161.97 in heavy volume.

The stock cleared a 157.95 buy point Wednesday in twice its usual volume. IBM will report Q4 results Jan. 18. Revenue has been a concern among analysts. The Street expects revenue to grow 1.3% to $22.05 billion in Q4.

IBM’s 157.95 buy point is flawed. The cup-with-handle base lacks a prior 30% uptrend. This makes the breakout less likely to work. However, the torrid volume Wednesday and so far Thursday are signs of institutional buying.

Warren Buffett’s Berkshire Hathaway (BRKA) trimmed its position 20%, 16% and  31% in Q1, Q2 and Q3 respectively. IBM is Berkshire’s eighth largest position, but analysts will be looking at the Q4 data to see if Buffet trims the position further.

The Innovator IBD 50 Fund (FFTY) rose modestly Thursday but is up 3.4% so far this week. The exchange-traded fund tracks the IBD 50, a list of the best stocks in fundamentals and technicals.

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Originally posted 2018-01-04 19:08:03.


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