Stock Market Today: Apple Up For Week; Can Stock Leaders Five Below, Green Dot, Square Win Big In Q4? | Stock News & Stock Market Analysis

Major indexes held to the downside in Friday afternoon trading following a mixed U.S. jobs report, but the market still looked poised for a positive first week in the fourth quarter of the year.

XAutoplay: On | OffMeanwhile, Apple (AAPL) continued to act constructively. Despite mild losses on Friday, the iPhone, Macbook and digital services titan is likely to finish higher for a second straight week.

Shares are up nearly 0.7% for the week at 155.03, within striking distance of its former 156.75 buy point in a decently formed flat base.

Continued trading below the 10-week moving average would likely spell the emergence of a new base pattern forming next to the flat base. Come Monday, Apple will be entering Week 6 of a potential new base. The correction from the stock’s 164.94 high has been mild, so far not exceeding 10%. This means that a potential new flat base, saucer, or shallow cup with handle could form.

With less than 15 minutes left in the session, the S&P 500 cut its already mild decline to less than 0.2%, while the Nasdaq composite was up slightly and the Dow Jones industrial average down nearly 0.1%. Small caps, which had a tremendous run in September, cooled a bit, too. The S&P SmallCap 600 edged just 0.2% lower.

Volume is running lower on both main exchanges vs. the same time Thursday and is much lighter on the Nasdaq.

Money continued to flow out of U.S. government bonds. The yield on the benchmark Treasury 10-year bond lifted to as high as 2.39%, up from an early September low of 2.05%.

The unexpectedly large gains in U.S. wages for September, both on a month-to-month and year-over-year basis, and a dip in the unemployment rate to 4.2% appear to be a tailwind for retail and consumer-oriented firms.

In that vast and important sector for both the economy and the U.S. financial markets, Five Below (FIVE), Square (SQ) and Green Dot (GDOT) stand out as companies to watch in Q4.

All three show excellent Composite, EPS and Relative Price Strength Ratings, as seen in IBD Stock Checkup.

Five Below, a Sector Leader, surged more than 4% in heavy turnover to 57.03, extended nearly 6% past a 54.01 early buy point in a cup base.

It’s important to refrain from chasing any top market leader more than 5% past the proper entry, or in the case of Five Below, beyond 56.71. The reason: After a brisk run up, a growth stock often gets hit by sellers wishing to take short-term profits, sending the stock back near the original buy point. During such a pullback, an investor who bought late can be saddled with a quick loss in an otherwise healthy stock. This can be especially the case when a trader buy a stock more than 10% or 20% past the proper entry.

The Sector Leaders screen is IBD’s most stringent for growth stocks; through Thursday’s close, just eight stocks within IBD’s database of nearly 10,000 issues were chosen by Sector Leaders based on a computer-driven analysis of fundamentals, stock price action and the current level of institutional accumulation.

Square is extended from a cup-base entry at 28.07. Watch for a potential mild pullback in light volume that could send shares back within buy range.

The buy zone for the innovator in point of sale transactions goes up to 29.47.

Green Dot, up nearly 9% for the week, is a major player in prepaid debit cards. Q3 earnings are seen lifting 29% to 27 cents a share.

Green Dot got its rally really moving when it cleared a 25.52 flat-base entry in January. Since then, the small-cap financial services and consumer spending play has touched its 50-day moving average just once.

The Pasadena, Calif., firm is expected to grow full-year profit by 40% to $2.05 a share, which would likely be an all-time high, then add another 17% to $2.39 a share in 2018.

Revenue growth has been accelerating. After two quarters of zero growth, the top line edged up 2% to $173.5 million in the second quarter of 2016, then lifted 6%, 8%, 11% and 28% the next four quarters.

Earnings per share dropped 4% in Q2 of 2016, but then jumped 40%, 217%, 28% and 104% vs. year-ago levels.

Green Dot has a float of 45 million shares and an average daily share volume of 424,000 shares. The stock has yet to reach its all-time high of 65.10, set in December 2010.


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Originally posted 2017-10-07 08:35:42.


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