Stock Market Today: Dow Industrials Lead Stocks Up; 5 Top Growth Stocks In Bases | Stock News & Stock Market Analysis

Investors continued to deploy capital in U.S. stocks Monday, the start of the fourth quarter, despite a horrific mass shooting at a country music event on the Las Vegas Strip late on Sunday. President Trump condemned the murders as an “act of pure evil” and urged Americans to unite and resolve their differences.

The small-cap Russell 2000 led the markets with a 1.2% gain. The 30-stock Dow Jones industrial average followed, advancing nearly 0.7% as at least 10 components rose 1 point or more. Most of them hailed from the medical, financial and industrial sectors.

The S&P 500, benefiting from rallies in housing and media-related stocks as well, rallied slightly more than 0.3%. The Nasdaq composite was not far behind, up 0.3%, following a solid gain of more than 1% last week that also featured a bullish test of support at the index’s 10-week moving average.

Volume grew on both exchanges vs. Friday, according to early data. A rise in the major indexes in higher volume is a sign of heavy institutional accumulation in shares. That’s positive for equities.

As seen in IBD’s Big Picture and Market Pulse, the market is currently in a confirmed uptrend, and few distribution days are on the books. A distribution is a significant decline in higher volume, which signals professional selling.

Meanwhile, Advanced Energy Industries (AEIS), Bioverativ (BIVV), Cabot Oil & Gas (COG), Goldman Sachs (GS) and IBD 50 name Stamps.com (STMP) are just five of perhaps a few dozen companies that get high IBD ratings and are forming the right side of bases.

Key bases to know and utilize when hunting for excellent breakouts include the following:

The cup with handle, a minimum seven weeks in length.

The double bottom, also a minimum seven weeks.

The flat base, a minimum five weeks in length (or 25 trading sessions as seen in a daily chart).

The saucer base.

Goldman is forming a saucer base, which can stretch as long as a year or more and shows a generally gentle pullback and slow rise near 52-week or all-time highs before the breakout. If a handle forms over a minimum five sessions, add 10 cents to the highest price within the handle to find the correct entry.

The Wall Street firm has yet to form a handle, so for now the proper entry is 255.25.

Also be sure to know what’s the average turnover for a stock. IBD uses the 50-day moving average as the gauge. You can see the 50-day moving average for volume on every IBD and MarketSmith chart.

On a weekly chart, use the 10-week moving average, which is the average weekly turnover over the past 10 weeks.

Bioverative, a spinoff from Biogen (BIIB), rallied nearly 2% and crossed over its 50-day moving average price-wise in heavy turnover, a bullish sign. Shares are forming a cuplike pattern and are 10% below the cup’s left-side high of 64.41.

The decline within the cup is a mild 16%, well within the maximum threshold of 33%, and it shows that holders are not so willing to dump their shares.

Stamps.com, which has posted terrific gains in the top and bottom lines in recent years, rallied 4.4% to 211.60 in thin volume and appears to have formed a nearly eight-week cup with handle. The proper buy point is 212.75.

Keep in mind that Stamps.com faces very tough year-over-year comps on EPS, as Q3 earnings are seen falling 16% to $1.95 a share after a 104% increase in the third quarter of 2016.

Stamps.com has also risen more than 330% since initially breaking out of an early-stage flat base on top of a longer base at 51.16 in the week ended Feb. 13, 2015.

RELATED:

How To Trade Stocks: How Do Bases Help You Make You Money?

 

Source link

Related posts:

No comments.

Leave a Reply