Dow Jones Industrial Average (.DJI) Still Rise Despite Mixed Bag With Earnings

Dow Jones Industrial Average (.DJI) Still Rise Despite Mixed Bag With Earnings

Dow Jones Industrial Average (.DJI) Still Rise Despite Mixed Bag With Earnings

With more marquee companies, including some members of the Dow Jones Industrial Average, stepping into the earnings confessional over the last 24 hours, there were ample headlines to move stocks Wednesday. While there was action to be had, gains for broader benchmarks were small.

Industrial stocks were an obvious spot of weakness for the Dow Jones with each of the index’s members from that sector trading lower today. Once again, Boeing (NYSE:BA) was an offender, shedding 1.58%, even after CEO David Calhoun said the company plans to continue paying its dividend “unless something dramatic changes.”

On the other hand, that doesn’t mean the payout will be increased as the company struggles with the 737 Max issue. Caterpillar (NYSE:CAT) was another industrial offender, dropping almost 2% on light news flow. That company reports earnings on Jan. 31.

Overall, 18 of 30 Dow stocks were higher in late trading.

Hooray For IBM

IBM, a company with a history of earnings disappointments and subsequent poor reactions by the stock, bucked that ominous trend today. Big Blue said it earned $4.71 per share on revenue of $21.80 billion in the fourth quarter, beating estimates calling for earnings of $4.68 cents and revenue of $21.64 billion.

“We ended 2019 on a strong note, returning to overall revenue growth in the quarter, led by accelerated cloud performance,” said IBM CEO Ginni Rometty in a statement. “Looking ahead, this positions us for sustained revenue growth in 2020 as we continue to help our clients shift their mission-critical workloads to the hybrid cloud and scale their efforts to become a cognitive enterprise.”

Some analysts were mostly encouraged by IBM’s results.

“Consulting revenue saw a lift of 4% year-over-year growth in the quarter, but that did not overcompensate for global business services’, or GBS’, roughly flattish revenue growth in the quarter, which is suffering weak demand for business process outsourcing,” said Morningstar in a note out earlier today. “We’re encouraged that the consulting business is not suffering instead, as consulting is a much higher-margin business, and we consider it to be a driver of other IBM offerings. Moreover, we expect business process outsourcing revenue to decline throughout the IT services industry.”

Bottom Line on the Dow Jones Today

In aggregate, the Wednesday performances of the Dow, Nasdaq and S&P 500 were by no means impressive, but the aforementioned IBM report could be something to build on, particularly if Intel, a better gauge of risk appetite, meets and beats tomorrow.

Technical Indicators

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 28,238.00.

The projected upper bound is: 29,627.31.

The projected lower bound is: 28,805.69.

The projected closing price is: 29,216.50.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 31 white candles and 19 black candles for a net of 12 white candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 74.5106. This is not an overbought or oversold reading. The last signal was a sell 0 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 65.88. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 1 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 97. This is not a topping or bottoming area. The last signal was a sell 0 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 8 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed down -9.770 at 29,186.270. Volume was 12% above average (neutral) and Bollinger Bands were 10% narrower than normal.

Open     High      Low     Close     Volume___
29,263.63129,320.19929,172.26029,186.270 283,437,568
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 29,043.07 28,304.00 26,937.09
Volatility: 8 9 14
Volume: 283,400,800 252,590,208 263,879,568

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

DJ INDU AVERG is currently 8.3% above its 200-period moving average and is in an upward trend. Volatility is Our volume indicators reflect volume flowing into and out of .DJI at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on .DJI and have had this outlook for the last 27 periods.

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