Dow Jones Limits Losses; Will This Sector Yield Winners?

Stocks today showed a relatively minor drop after the prior day’s big rebound, an indication that not all institutional investors are selling with gusto. The Dow Jones industrial average, which rose almost 5% on Wednesday, gave back 2.2% at around noon in New York Thursday.

The Nasdaq composite surrendered nearly 1.9% following a 5.8% surge on Wednesday, its biggest single-session move in years. At 6423, the tech-weighted composite index still lies 21% below an all-time peak of 8133.

Meanwhile, a small group of tech sector leaders have held up better than the Nasdaq by dropping less from their recent 52-week peaks. Atlassian (TEAM), part of the top-ranked specialty enterprise software industry group, fell nearly 2% but volume is extremely dull. The stock is holding up above the key 50-day moving average and shares trade 14% below a 98.21 high.

These Stocks Are Not In The Dow Jones — Yet

Australia-based Atlassian, which helps companies enhance collaboration in software development and other business projects, is currently one of four companies to make the IBD Sector Leaders stock list.

The fabless semiconductor group, meanwhile, may be worth close monitoring.

The industry group has hustled its way to No. 47 among 197 industry groups for six-month relative price performance. That’s up from 118th place just four weeks ago.

Broadcom (AVGO) is a clear leader in the group. The giant chipmaker and designer scores a 91 EPS Rating and an 88 for Relative Price Strength. This means the San Jose, Calif., firm ranks high in both profitability (the most important factor in IBD’s CAN SLIM investing system) and in stock price strength.

Broadcom also scores very high in the Composite Rating with a 98, as do its group peers Xilinx (XLNX) and Mellanox Technologies (MLNX).

The S&P 500 fell about 1.7%. The small-cap S&P 600 fell 1.2% after rising nearly 4.8% on Wednesday. Volume is running lower vs. the same time Wednesday on the Nasdaq and a bit higher on the NYSE.

Precious Metals Miners Still Shine

Kirkland Lake Gold (KL), a day after its wild reversal, resumed its impressive climb. Shares rose 1% to 25.60, moving nearly 7% past a 23.96 buy point in a solid cup without handle.

This means the Toronto-based gold miner is back outside the 5% buy zone after a breakout earlier this month.

Please follow David Saito-Chung on Twitter at @IBD_DChung for more on growth stocks, chart analysis, bases and financial markets.


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Originally posted 2019-09-19 23:29:17.


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