Dow Jones Tries To End Bearish Action

The Dow Jones industrial average rallied more than 2% around midday Wednesday, trying to halt a massive four-session slide. But the Nasdaq composite is leading the rebound in stocks today, aided by institutional bargain-hunting in the FANG stocks.

Apple (AAPL), meanwhile, is also trying to stop a four-day selling skid with a gain of more than 3%. Volume is running at more than 40% its usual daily pace of 43.6 million shares per day. The iPhone giant is undergoing its steepest correction since marking a 45% drop from September 2012 to April 2013.

The Nasdaq composite, which hit the technical definition of a bear market during last week’s waterfall-style decline, rose 2.8%. The Nasdaq 100-tracking Invesco QQQ Trust (QQQ) ETF rallied 3.1%, beating a 2.1% advance by the S&P 500.

Apparel, retail, software and fiber optic gear stocks paced the fairly broad rally as nearly three dozen of the IBD 197 industry groups jumped 1.5% or more. See the daily performance here or go to the Stock Lists section of, then click on IBD Data Tables.

Department store, variety, apparel, internet and home furnishings retailers all gained 2% or more as groups.

The Dow utility average lagged on Wednesday following Tuesday’s Christmas holiday, falling around 0.1%. The Dow Jones transports rose 2.5%.

The Innovator IBD 50 (FFTY) gained more than 2.2% as it too seeks to lick its big wounds. The ETF has dropped nearly 35% from a 52-week peak of 38.79. The ETF focusing on high-growth companies gained 34% in 2017. SPDR Gold Shares (GLD) gained 0.6%, lagging the major indexes. But the gold-tracking fund is having an excellent quarter, up 7%.

The ETF is forming a saucer pattern.

Retail And Consumer Stocks Lead Rebound

The day’s top performer is the shoe making group, led by Dow Jones Industrial member Nike (NKE). The shoe and athletic apparel king rallied nearly 3% to 70.14.

While the stock trades 18% below its 52-week peak of 86.04, it’s definitely suffered less damage than the major indexes. Hence, check out its rising relative strength line, drawn in blue in every IBD chart and in MarketSmith.

When a stock prepares a new base ahead of a potential breakout, watch its relative strength line. Often, the biggest stock market winners will show an RS line vaulting into new high ground on the breakout day or soon afterward.

Nike, for now, is still trying to bottom out. The big cap still trades well below its 50- and 200-day moving averages. IBD Stock Checkup notes that Nike scores a high Composite Rating of 93 on a scale of 1 to 99.

Please follow Chung on Twitter at @IBD_DChung for more on growth stocks and financial markets.


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Originally posted 2019-09-19 23:29:12.


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