Stock Market Today: Dow Jones, S&P 500 Pace Stock Market Gains But Boeing Delivers New Sell Signal | Stock News & Stock Market Analysis

The stock market today showed mild gains at midday but looked headed for weekly losses. Meanwhile, the Dow Jones industrial average saw at least seven of its 30 stocks rise 1 point or more on Friday. Boeing (BA) erased early losses and is up slightly, but the stock is on track to lose more than 6% for the week.


More importantly, the passenger jet and military plane giant has now undercut the critical 10-week moving average in volume running more than 40% above normal levels. Based on IBD research, a leading stock that falls sharply beneath this medium-term support line in heavy turnover is raising a big red flag, indicating institutions are taking profits heavily and a major correction is likely.

Some stocks are so powerful that they immediately rebound back above the 10-week line the following week. So, it’s important to see how Boeing, a Dow industrial index component, behaves in the coming days. A truly deep decline would mean that a challenge of institutional support could take place near or at the 40-week moving average, which is currently near 273.

Boeing would have to fall roughly 26% from its all-time peak of 371.60 to test the 40-week line, which is displayed on all charts in MarketSmith, IBD’s premium charting and stock screening service.

For now, Wall Street has not downgraded Boeing’s annual earnings estimates. The company is expected to deliver profit of $14.07 a share this year, up 17%, and a 19% EPS gain to $16.68 in 2019.

It’s the first time for the megacap global aviation play to trade under the 10-week moving average in a big way since shares broke out of a giant first-stage saucer with handle at 139.55 during the week ended Oct. 28, 2016.

That base began forming in late February 2015, when Boeing peaked at 158.83, then slumped for the next 20 months.

At 1 p.m. ET, the Dow Jones industrials and the S&P 500 advanced around 0.4% to 0.5% while the Nasdaq composite gained about 0.1%. Specialty retail, data storage, contract electronics manufacturing, solar and RV firms led the upside with gains of more than 2%.

Small caps are doing even better. The S&P SmallCap 600 rallied nearly 0.9%.

The Dow transports gained more than 1%. Covenant Transport (CVTI), featured in a Thursday Stock Market Today column after vaulting 19% and surpassing a 30.71 buy point in a base, gave up just 1% to 31.66. The thinly traded provider of truckload carrier service is still within the 5% proper buy zone.

Volume is running sharply higher on both main exchanges as weekly and monthly options on stocks and indexes expire.

Amid flat crude oil prices, the airline group is up 2%. Foreign-based airlines in the group are outperforming their U.S. counterparts.

Dublin-based Ryanair (RYAAY) has formed an unusual cup with handle that offers a 125.32 entry. The company, which has aggressively expanded routes from Northern Europe into southern areas of the continent and the Middle East, grew revenue by 19% to $1.69 billion in the fiscal third quarter ended in December. That’s the biggest top line increase since a 25% lift in the quarter ended March 2016.

Earnings rose 32% in fiscal Q3, following a 5% drop in Q3 of fiscal 2017 and gains of 5%, 67% and 8% the next three quarters.

Copa Airlines (CPA) has faced upside resistance near 140 for more than three months. The Panama-based airline found bullish support at the 200-day moving average during the early-February market sell-off. Analysts expect the passenger and cargo air service to post earnings of $10.41 a share in 2018, up 20%.

RV maker Winnebago Industries (WGO) is trying to bottom out as the stock continues to get support near the long-term 200-day moving average. Winnebago, up more than 6%, is also close to testing resistance near its falling 50-day moving average.

Winnebago’s RS rating has fallen from a 94 to 73 over the past eight weeks. Watch to see if it improves. As seen in IBD Stock Checkup, Winnebago shows a negative Accumulation/Distribution Rating of D-, meaning institutions are likely net sellers over the past 13 weeks.

Home furnishings retail and discount and variety retailers are also excelling.

Five Below (FIVE), the innovative store chain selling goods at $5 or less, rose more than 1% for a fourth up day in a row. The stock has been building a cup base that now features a distinct handle, providing a 71.69 buy point. To find the handle, add 10 cents to the highest price within the handle.

A much more narrow, hard-to-see handle had formed earlier, seen only on a daily chart, and gave a 68.48 entry. A handle must be a minimum five days long.

An excellent cup with handle typically shows a decline of 12% to 25% and can reach upward of 33%. The correction in Five Below’s cup is a mild 18.4%. The small-cap firm showed a solid prior uptrend before forming the current base. It went public at 17 a share in July 2012.

The Street sees fourth-quarter earnings rising 29% to $1.16 a share. Five Below is slated to report January-ended Q4 results after the close on Wednesday. Fiscal 2019 profit is seen increasing 32% to $2.38 a share from $1.80 in FY 2018.

The yield on the benchmark U.S. Treasury 10-year bond edged up to 2.85%. Investors will be watching the Treasury market carefully as the Federal Reserve holds its next meeting on interest rates on Tuesday and Wednesday.

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


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Originally posted 2019-09-19 23:11:12.


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