Dow Jones Industrial Average (.DJI) Technology stocks led the upside
Technology stocks led the upside in afternoon trading Monday. Top stocks in the Nasdaq 100 included Adobe (ADBE), up nearly 4%. It cleared the 250 level, which had been resistance in recent days. In the Dow Jones today, Microsoft (MSFT) and Apple (AAPL) were top gainers, rising more than 2% each.
Dow Jones Today: Gainers
Shares of Microsoft were up 2.6% on the heels of last week’s earnings report. It’s trading near its 50-day moving average as it works on a cup-with-handle base.
Apple, meanwhile, looked poised to extend its winning streak to four sessions. Shares rose 2.6%, but Apple is still 26% off its high and not near an actionable entry.
Outside of the Dow Jones today, blue chip stock Clorox (CLX) showed strong technical action, gapping above its 50-day moving average on strong earnings. Shares were up nearly 7%.
In other stock market news, shares of Ultimate Software (ULTI) soared more than 19% on news the company is being taken private by an investor group led by Hellman & Friedman.
Enterprise software stocks like Ultimate Software have been leading the market for some time. It’s one of the few sectors areas in the stock market where there’s earnings visibility. Not only do several leading enterprise software stocks shows huge earnings and sales growth in recent quarters, but strong growth is expected in coming quarters as well.
Separately, Papa John’s (PZZA) jumped 9% after activist hedge fund Starboard Value said it would invest $200 million in the pizza chain. Starboard CEO Jeffrey Smith will take over as chairman.
Inside the IBD 50, Trade Desk (TTD) was a nice gainer, up 5.5% in strong volume. It’s still in buy range from a 149.10 entry. Results are due Feb. 21 after the close.
Other top gainers in the IBD 50 included BioTelemetry (BEAT), Atlassian (TEAM), Paycom Software (PAYC) and Leaderboard stock Veeva Systems (VEEV).
Meanwhile, IBD 50 stock Match Group (MTCH) was resilient despite a sell rating from Goldman Sachs and 45 price target. Earnings are due Wednesday after the close. After falling nearly 6% intraday, shares were down 0.8% in afternoon trading. Match has been a top performer in the internet content group along with IAC/Interactive (IAC).
Google parent Alphabet (GOOGL) added 1% ahead of Q4 results after the close. Due to low implied volatility, an earnings option trade was discussed last week.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 26,321.37.
The projected lower bound is: 24,166.24.
The projected closing price is: 25,243.81.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 30 white candles and 20 black candles for a net of 10 white candles.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 89.9718. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 8 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 65.68. 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 buy 26 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 134.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 5 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 22 period(s) ago.
Rex Takasugi – TD Profile
DJ INDU AVERG closed up 175.479 at 25,239.369. Volume was 17% below average (neutral) and Bollinger Bands were 17% narrower than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 24,769.65 24,175.43 24,987.46
Volatility: 15 29 20
Volume: 360,748,576 372,333,056 329,661,344
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.
DJ INDU AVERG is currently 1.0% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect moderate flows of volume into .DJI (mildly bullish). Our trend forecasting oscillators are currently bullish on .DJI and have had this outlook for the last 15 periods.
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