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Stock Breakouts Scarce; Huya, iQiyi, JPMorgan, Caterpillar Boom

Dow futures edged higher late Monday, along with S&P 500 futures and Nasdaq futures. The Dow Jones led another solid stock market advance, with the S&P 500 index and Nasdaq composite also strong following Friday’s big rally. But quality breakouts were scarce. Monday’s big winners tended to be recent laggards, including Dow Jones components Caterpillar (CAT), JPMorgan Chase (JPM) and Goldman Sachs (GS) as well as recent China livestreaming IPOs Huya (HUYA) and iQiyi (IQ).

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The lack of breakouts is somewhat surprising. Friday’s post-jobs-report, post-China-tariffs surge triggered a shift in IBD’s market direction back to confirmed uptrend. Given that stocks, even leading stocks, tend to follow the major averages, you’d expect to see some new breakouts. The Nasdaq composite is just below last month’s record high, while the S&P 500 index is just below a four-month best, near a handle-like formation. The Dow Jones reclaimed its 50-day moving average Monday.

Top Stocks Near Buy Points

There are some quality stocks working on buy points. Marathon Oil (MRO) and EOG Resources (EOG) are among the many energy stocks closing in on breakouts. Trendy apparel and handbag retailer Michael Kors (KORS) — along with Dollar General (DG) and Home Depot (HD) — is also in sight of an entry area. But none of these top stocks cleared buy points in Monday’s stock market trading.

Cactus (WHD) stock shot up 4.5% to 35.60 during the regular session, reaching 37.38 intraday, just below a 37.60 cup-base entry. But the maker of wellhead and pressure-control equipment tumbled late on plans for a follow-on offering.

Dow Dogs Have Their Day

Instead, Monday was for laggards. The day’s top-performing groups tended to be ranked near the bottom of the 197 industries tracked by IBD, with few in the top quartile. The Dow Jones industrial average, up 1.3%, outpaced the 0.9% gains for the S&P 500 index and Nasdaq composite.

Within the Dow Jones, the big winners were Caterpillar, JPMorgan Chase and Goldman Sachs, up 4.1%, 3.1% and 2.7% respectively. But Caterpillar stock is still below its 50-day and 200-day moving averages. So are JPMorgan stock and Goldman stock, after both hit 2018 lows last week.

Huya Stock Headlines Livestreaming Rebound

Huya stock, a recent spinoff from YY (YY), shot up 18% Monday. Meanwhile, iQiyi stock, a Baidu (BIDU) spinoff, rebounded more than 6%. Bilibili (BILI), another recent China livestreaming IPO, popped 4%. Huya is the only one that has turned profitable. Huya stock and iQiyi rose modestly in late trade, extending Monday’s regular-session run.

All three stocks were big winners in May and much of June, but then sold off sharply. Perhaps Huya, iQiyi and Bilibili will consolidate and form new bases and buy points. But they have a lot work to do.

Dow Futures Today

Dow futures rose a fraction vs. fair value. So did S&P 500 futures and Nasdaq 100 futures.

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