Stock Market Today: Indexes Up, Bitcoin ETF Triggers Sell Signal; This Sector Breaks Out | Stock News & Stock Market Analysis

Major indexes held on to light gains in afternoon trade Thursday while a hot Bitcoin-tracking exchange traded fund ushered its first key sell signal since blasting out of a deep cup with handle on Nov. 24.

X Bitcoin Investment Trust (GBTC) got showered by sellers for a third straight session as shares dropped more than 24% in trading running double its 50-day average.

At 1,807, it was also the first time for the ETF to slide significantly below the 10-day moving average, a key sell signal for short-term trading.

The 10-day moving average represents the average closing price over the past 10 trading sessions and can help determine an early exit for a stock or a highflying ETF that has broken out of a proper base such as a cup with handle or a flat base.

Meanwhile, Chevron (CVX) led an impressive rebound among integrated oil and gas firms as the Dow Jones industrial average member surged more than 3% to 125.24 in heavy turnover. That gain hoisted the San Ramon, Calif., energy giant further above a 120.99 buy point in a six-week flat base.

That flat base is part of an even longer consolidation. Chevron’s buy zone goes up to 127.04.

Other strong stocks in the oil patch include EOG Resources (EOG) and Diamondback Energy (FANG), which is one of four stocks to join IBD Leaderboard in December. Diamondback is now 7% past a 115.03 buy point and thus extended in price. The right time to buy a stock following its breakout is when it is still within 5% of the proper entry. In Diamondback’s case, the buy zone goes up to 120.78.

Other exploration and production stocks breaking out include Royal Dutch Shell (RDSA) (flat base, 65.93 buy point), Norway’s Statoil (STO) (flat base, 21.12) and Concho Resources (CXO) (base on base, 147.87).

At 2:45 p.m. ET, the Dow Jones industrial average and the S&P 500 posted gains of around 0.4% and still look poised for weekly gains. The Nasdaq composite slightly lagged, up nearly 0.3%. Small caps are outperforming with the Russell 2000 up more than 0.7%.

The Dow transports cooled off a bit, trading virtually flat, after running up four sessions in a row and rising almost 3.4% over that period. One of Thursday’s top industry groups is shipping transport, up more than 4% as a group. But none of the companies in the 31-member industry group holds a Composite Rating of 90 or higher. The highest-rated name is Genco Shipping & Trading (GNK), a thinly traded dry bulk carrier. The stock has formed a handle on a base that resembles a double bottom. The buy point is 13.83, a dime above the handle’s high.

While Genco sports a lowly Composite of 65 on IBD Stock Checkup, the RS Rating is strong at 89 and the Accumulation/Distribution Rating is positive at B.

On the Dow industrials, at least seven stocks are up 1 point or more, including Wall Street giant Goldman Sachs (GS). The investment bank rose 2.2% in active turnover and is aiming to move out of the 5% buy zone after clearing a saucer with handle at 247.84.

On an adjusted basis, Goldman has notched five quarters in a row of rising earnings growth. Revenue has increased 22%, 18%, 31%, 6% and 11% vs. year-ago levels over the same time frame.

Back to Chevron, the Street sees earnings rebounding 459% to $1.23 a share in the fourth quarter. In the year-ago quarter, profit dropped 38%.

Yet amid the recent strength in crude oil prices, boosted in large part by OPEC’s success in extending its pact to cut supply through the end of 2018, Chevron’s top line has enjoyed a startling turnaround.

Diamondback, an expert in the Permian Basin region and West Texas, rallied for a fourth straight session and jumped more than 3% to 120.96 in strong turnover. Mutual funds and hedge funds owning shares in the midcap energy play have risen for at least 18 quarters in a row. In the third quarter, 979 funds owned a piece of Diamondback, up from 584 funds in Q3 of 2015 and 731 funds in Q3 of 2016.

Analysts see earnings rising 191% this year to $5.10 a share, which would be an record for the Midland, Texas-based firm that was incorporated in 2011. In 2018, earnings are seen rising another 24% to $6.30 a share.

Pretax margin was 25.6% in 2016.

The SMR Rating is a top-notch A on a scale of A to E as seen in IBD Stock Checkup. The Composite Rating is a respectable 92.

(Follow Saito-Chung on Twitter at @IBD_DChung for additional stock market analysis and commentary.)


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Originally posted 2017-12-24 12:09:44.


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