Dow Jones Rises While Nasdaq Remains Lower; These Stocks Are Breaking Out Past Buy Points

The Dow Jones Industrial Average traded higher in today’s stock market, after opening lower, as the major indexes all reversed off their lows of the day. The S&P 500 traded slightly lower. The Nasdaq composite remained negative despite climbing in afternoon trading.


At the close of the day, the small-cap Russell 2000 was down roughly 2.5%, leading the market on the downside. Meanwhile, the Nasdaq composite was down 0.6%. The S&P 500 moved back into the negative, down nearly 0.1%, while the Dow Jones industrials held a gain of 0.3%. Volume was trading lower on the Nasdaq and on the NYSE compared with the same time on Friday.

According to data from the Cboe, the benchmark U.S. Treasury 10-year bond yield rose for a second straight day, hitting 1.72% on Monday.

Solar, oil equipment, enterprise software and semiconductor equipment stocks led the downside. These groups all fell more than 2% each. Meanwhile, utility, insurance broker and aerospace stocks rose, helping offset the day’s declines.

The price of crude oil rebounded nearly 1% to $61.56 a barrel after falling roughly 1% earlier in the day. The Suez Canal finally opened up again after a cargo ship was freed after blocking the critical passage for nearly a week.

Stocks Breaking Out

Several cyclical stocks showed renewed strength on Monday. U.S. Steel (X) broke out past a 24.56 buy point of a cup-with-handle base in heavy volume after bouncing off the 50-day moving average late last week. Shares remain just 3% below the buy zone after rising more than 4% on Monday.

Meanwhile, MarketSmith Growth 250 stock Flir Systems (FLIR) broke out from a flat base with 56.42 buy point. Shares gained support at the 50-day line last week before heading into the buy zone on Monday. The stock is now just 1% below the buy area. Teledyne Technologies (TDY) announced in January a plan to acquire the firm.

As for growth stocks, the Innovator IBD 50 ETF (FFTY) declined roughly 2.6%. The growth-focused index traded below support at the 50-day line after reclaiming this key area last week. Stocks leading the downside on Monday were At Home Group (HOME), Floor & Decor (FND) and Plantronics (PLT) with losses of more than 4.8% each.

But a small handful of IBD 50 stocks bucking the decline included Repligen (RGEN), Boston Beer (SAM) and Alphabet (GOOGL), up 0.4% or more each.

Dow Jones Today

As for the Dow Jones, Boeing (BA), Walgreens (WBA) and Coca-Cola (KO) led the upside with gains of over 1.5% each. On the downside, shares of financial companies JPMorgan Chase (JPM) and American Express (AXP) were down 0.8% or more each.

Leaderboard stock Microsoft (MSFT) declined a little less than 1%. The stock is finding support at the 50-day line. Microsoft is also an IBD Long-Term Leader stock. Shares recently climbed back above a 232.96 buy point, which puts the software giant in potential buy range that tops out at 244.61.

The stock is also approaching a 246.23 buy point of a new flat base, according to MarketSmith chart analysis. Microsoft stock is about 5% away from the entry.

Elsewhere, Intel (INTC) lost roughly 0.5% on Monday as shares traded back below the 5% buy zone of a double-bottom base with a 65.21 buy point. Shares of Intel already broke out into the buy zone last week but slipped back below the buy point. The buy zone tops out at 68.47, according to MarketSmith chart analysis.

Intel’s relative strength line, which has been climbing in recent months, still remains well off its highs. Additionally, the RS Rating of 54 remains well below the minimum 80 we like to see for growth stocks breaking out.


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