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Stock Market Today: Dow Jones Industrials Lead Stocks Up; This Sector Jams; The Right Time To Sell GE | Stock News & Stock Market Analysis

Stocks held a broad rally into the final hour of trading on Wall Street on Friday, with the Dow Jones industrial average leading the way. Dow industrials component General Electric (GE) staged a positive reversal, up nearly 0.8% after tanking more than 5% intraday.

XAutoplay: On | OffThe Dow Jones industrial average gained nearly 0.6% and was close to session highs as at least six of the 30 components rose 1% or more.

The S&P 500 and the Nasdaq composite both rallied more than 0.4% and looked set to make their fourth and sixth straight weekly advances, respectively.

Volume is running higher vs. the same time Thursday on the NYSE and lower on the Nasdaq.

Johnson & Johnson (JNJ), highlighted in an earlier Stock Market Today column as it cleared a new buy point at 137.18, looked poised to finish the week up more than 4% and remained within proper range.

GE, which reported disappointing third-quarter results and poor guidance, is in need of strong leadership by its new CEO John Flannery to turn around the company’s fortunes. He is expected to unveil a new strategy next month.

For recent new traders in the stock the best time to have sold GE was after its breakout from a 22-week cup with handle at 32.10 on Dec. 20, 2016. Volume was decent that session, 20% above average, but not great.

Soon, GE shares tanked and on Jan. 23 triggered the golden rule of selling. The stock sank 2.6% to 29.75, more than 7% below the recent breakout entry. Cutting losses short would have allowed an investor to raise cash and buy a better performer.

Notice how on a daily chart, the stock had already dived beneath its critical 50- and 200-day moving averages in heavy turnover. That’s not the kind of action you want to see after a breakout.

Elsewhere, steel shares continue to rebound. IBD’s Steel Producers group is up more than 16% since August. The leaders include Steel Dynamics (STLD) and South Korea’s Posco (PKX).

Steel Dynamics rallied 3% to 38.95, streaking past a 38.80 early buy point in a long flat base that can also be construed as a saucer.

The mini mill expert reported a 2% rise in Q3 profit after showing a huge increase in the year-ago quarter. Sales rose 16%, extending double-digit top-line gains for a fourth quarter in a row.

Q4 profit is seen accelerating 29% to 58 cents a share.


IBD’s TAKE: As seen in IBD Stock Checkup, Steel Dynamics garners an A- for IBD’s proprietary Accumulation/Distribution Rating. See how the Stock Checkup doctor is smiling? A C+ or higher grade is preferred when a stock is aiming to break out.


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