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Dow Jones Rallies, Apple Still Strong; Can These 4 Growth Stocks Win Big In Q2?

The stock market accelerated its rebound, and the Dow Jones industrial average kept pace with a rebound by the Nasdaq composite. The blue chip Dow looked poised to rise more than 2.5% for the week ahead of a three-day Easter holiday weekend. Boeing (BA), Apple (AAPL) and UnitedHealth Group (UNH) commanded the upside as at least six of the Dow Jones components gained 2 points or more.

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At 3:45 p.m. ET, the 30-stock blue chip Dow rallied more than 1.6%, just a bit shy of a 1.9% lift by the Nasdaq. The large-cap S&P 500 rallied 1.7%. All three indexes are likely to finish the week higher after two straight weekly declines.

Volume is running sharply lower vs. the same time on Wednesday. The stock market will be closed Friday in observance of Good Friday.

At 24,157, the Dow Jones industrials are still down 2.3% since Jan. 1 following a 25.1% advance in 2017.

Innovator IBD 50 (FFTY) bolted 3% higher, keeping abreast of its key 200-day moving average. The exchange-traded fund gained more than 37% in 2017.

In IBD Leaderboard, where select stocks show annotated daily and weekly charts to highlight buy points and sell signals, six of the seven current members advanced 1% to 6%.

Apple Still A Shiny Tech

Apple is one of four growth stocks to watch in Q2 and the rest of the year. Two reasons why? They are showing decent relative strength and have market-leading estimates for earnings and sales growth.

The iPhone and iPad marketer has become a powerhouse in digital services, as reported frequently by IBD. CEO Tim Cook continues to express confidence that Apple will reach its $20 billion goal in services revenue alone by 2020.

The Street sees Apple’s earnings rising 24% to $11.44 in the current fiscal year ending in September. Indeed, few mega-cap companies, let alone those in the technology sector, show such a robust bottom-line estimate.

Analysts also see total revenue ramping up 14% to $261.9 billion, following an 8% shortfall in FY 2016 and a 6% boost in FY 2017.

Apple finished last year with a 43% gain following a breakout on Jan. 6, 2017 from a first-stage cup with handle at 118.12. First-stage bases generally have a higher success rate than a third, fourth or fifth-stage pattern.

Today, Apple shares are trying to climb back above the 50-day moving average. Watch for a new potential base to form.

Will This Blue Chip Fly Again?

Boeing may also end up as another market outperformer in 2018, despite having already issued a defensive sell signal two weeks ago. The reason? The current correction has not been too deep.

On Friday, the 737 and 787 airline jet maker rebounded 1.8% to halt a two-day selling skid and is just 12% below its all-time peak of 371.60.

Second-quarter earnings are looking fierce, up 27% to $2.56 a share, as global demand for passenger jets continues to rise. China, India and Latin America remain high-growth markets.

Sales are seen picking up 4% to $97 billion in 2018, following two years of decline, then accelerate 6% to $102.7 billion in 2019.

Elsewhere, Five Below (FIVE) and Ferrari (RACE) deserve spaces on an investor’s watch list. Both are relatively new public companies and are expected to deliver fine growth.

The former, part of IBD Sector Leaders, is trying to rise further past a 61.59 buy point in a solid cup with handle. The discount variety chain’s 11-week base shows a mild correction of just 18%, symmetry between the left and right side, and a volume dry-up within the handle.

The 5% buy zone extends up to 75.27.

Ferrari is building a potential base on base. The Italian luxury race car builder is up nearly 0.5% to 120.14 and up more than 14% year to date.

On IBD Stock Checkup, Ferrari currently gets an 89 Composite Rating on a scale of 1 to 99. That’s slightly below the 90 threshold you’d like to see. However, Ferrari ranks first within the automakers industry group, which has been dragged lower within IBD’s daily rankings of 197 industry groups and subgroups for six-month relative performance.

The reason? Tesla (TSLA), which soured this past week despite gaining more than 3% to 265.89 in fast turnover. At one point, the EV pioneer hit as low as 248.21, falling 36% below its 52-week peak of 389.61 set in September last year.

Wall Street sees Tesla losing $3.20 a share in the first quarter. The San Francisco-based company lost $1.33 a share, $1.33, $2.92 and $3.04 in the prior four periods.

Nevertheless, those who bought Tesla during its April 2013 breakout near 40 still hold a handsome profit cushion.

(Please follow Saito-Chung on Twitter at @IBD_DChung for additional commentary on top stocks, growth companies, breakouts, sell signals, and financial markets.)

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