Five Stocks Flash Buy Signal

Five Stocks Flash Buy Signal

Dow Jones futures rose early Wednesday, as did S&P 500 and Nasdaq futures. The stock market rally accelerated on Tuesday, even as Treasury yields rose. The major indices are still trading within their recent ranges. Apple (AAPL) is nearing a buy signal. Investors could potentially buy Apple stock now from the 50-day moving average.

Meanwhile, Expedia (EXPE) stock broke out on Tuesday, with earnings due Thursday. The online travel site’s stock rose 3.5 percent to 193.90, setting a new high and clearing the 190.88 buy point. Several hotel/casino stocks show signs of early entry or breaking out. MGM Resorts (MGM) broke through short-term resistance, but earnings are due on Wednesday. Hilton Worldwide (HLT) and Hyatt (H) are on the rise, while Marriott International (MAR) has reached an official buy point. They will all be paid the following week.

From Expedia to MGM, all of these stocks have relative strength lines at or near highs. It reflects their outperformance in comparison to the S&P 500 index.

With coronavirus cases on the rise once more, travel activity should increase. However, the impending earnings reports are a source of concern. Investors who want to play these stocks right now should consider using an earnings options strategy. Paycom (PAYC), Doximity (DOCS), Enphase Energy (ENPH), Global Foundries (GFS), and Chipotle Mexican Grill (CMG) all rallied overnight on earnings but are still well off their highs. New Relic (NEWR), a new database software maker, plunged in extended trading on mixed results and weak guidance.

CVS Health (CVS) earnings are due Wednesday morning, and shares have reached new highs. As a drugstore, pharmacy benefit, and health insurance behemoth, its outcomes and guidance will be critical for many medical firms.

Dow Jones Futures Today

Dow Jones futures gained 0.55 percent compared to fair value. The S&P 500 futures rose 0.7 percent, while the Nasdaq 100 futures rose 0.95 percent.

The yield on the 10-year Treasury note fell three basis points to 1.92 percent. Crude oil prices fell slightly.

Remember that overnight trading in Dow futures and other markets does not always translate into actual trading in the next regular stock market session. The stock market rally began with a mixed bag and moved steadily higher.

On Tuesday, the Dow Jones Industrial Average rose 1.1 percent in stock market trading. The S&P 500 index rose 0.8 percent.

The 10-year Treasury yield increased by four basis points to 1.95 percent, reaching a new two-year high of 1.97 percent intraday. Crude oil futures in the United States fell 2.2 percent to $89.36 per barrel.

Apple’s stock rose 1.85 percent to 174.83, regaining ground on its 50-day moving average. The RS line, shown in blue in the charts, is still at all-time highs.

Market Rally Analysis

Tuesday was a good day for the stock market rally. On the other hand, the major indices are still trading in a relatively narrow range between last week’s highs and lows.

Given the recent spike in Treasury yields, it’s encouraging to see the indexes, particularly the Nasdaq, gain ground. However, the market will sometimes take seemingly terrible news in stride until it doesn’t. The CPI inflation report on Thursday looms large.

The S&P 500 has maintained its 200-day moving average and closed just below its 21-day. If it rises above last week’s highs, it will essentially be at its 50-day moving average. On Tuesday, the Dow Jones rose above its 21-day moving average but fell just short of its 50-day moving average.

After rising on Monday as the major indexes fell, the Russell 2000 led the charge on Tuesday. Some of this is most likely due to the strength of smaller financial stocks. After a long period of weakness, overall market breadth is improving slightly.