Sunday, December 3, 2023

Dow Up 250 Points; Buffett Stock May Set Up This Potential Entry

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The Dow Jones Industrial Average gained more than 250 points during bullish action in the stock market today. Its 0.7% gain lagged key index peers, but the Dow’s move underscored growing breadth in the current advance. Warren Buffett-owned StoneCo (STNE) traded quietly after a sweet rally in the prior six sessions.


And quiet action could be a good thing for the Brazil fintech firm. StoneCo, part of IBD’s credit card and payment processing industry group, has now formed the right side of a cup base.

Watch to see if the midcap growth stock can now possibly fashion a handle on the cup pattern. (Please check out our coverage on StoneCo and other Warren Buffett plays near a buy point.)

IBD noted the start of a potential tradable rally commencing on Nov. 1, when the Nasdaq ran ahead 1.6% in higher turnover vs. the prior session. That follow-through day arrived on the fourth day of a new rally attempt. It also occurred after the Federal Reserve decided to keep short-term interest rates unchanged.

Meanwhile, the Nasdaq led the way on Monday, up more than 1.1% with an hour left in the regular session. The composite index had already jumped three weeks in a row, rallying 11.7% in the process.

Stock Market Today

The S&P 500 gained 0.8% and is gunning for its fourth straight up week.

The last time the S&P 500 had such a win streak? A five-week run-up from the week ended May 19. The large-cap benchmark rallied 6.9% over that period, then pulled back the week ended June 23 with a 1.4% decline for that week.

Investors appear to be shrugging off, for now, a sharper-than-expected decline in the last monthly leading economic indicators (LEI) index. The LEI fell 0.8% in October, larger than the Econoday consensus forecast for a 0.6% dip. The latest drop was bigger than a September decline of 0.7%.

Volume was running higher on the Nasdaq vs. the same time on Friday and lighter on the NYSE. The stock market will be closed on Thursday for Thanksgiving, then open at the regular 9:30 a.m. ET time on Friday but end early at 1 p.m.

Elsewhere, long-dated U.S. Treasury bonds fell amid a heavy day of government debt auctions that included a 20-year bond sale. The key 10-year note’s yield edged nearly 2 basis points to 4.42%.

Gold edged lower to $1,979 an ounce, while silver futures fell 1.2%. But crude oil futures rallied nearly 2.9%.

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Dow Jones Leaders

Inside the Dow Jones industrials, at least five of the 30 components gained 2 points or more, including Boeing (BA). The aerospace giant got an analyst upgrade from Deutsche Bank. BA stock rose as much as 4% and created further bullish airspace above its 200-day line.

Wall Street thinks the company will return to the black in 2024, earning $4.38 a share. Boeing lost $11.06 a share in 2022 and is seen cutting its net loss this year to $6.10. Sales have risen on average 23.5% vs. year-ago levels in the past four quarters.

Salesforce (CRM), also in the Dow Jones, outperformed the general market. At around 3 p.m. ET, shares rose more than 1.4%.

CRM has snagged a spot on the Watchlist of IBD Leaderboard. It’s recently cross a trendline buy point near 215 and is in buy range from this aggressive entry. The Dow Jones tech stock also got featured in this IBD weekly feature on stocks near a buy zone.

Watch for October-quarter results from the pioneer in cloud-based customer relationship management and enterprise software on Nov. 30.

Want To Find An Extra Proper Buy Point? Eye This Chart Action

Airlines Lag

Meanwhile, outside the Dow Jones, airlines have struggled to join the stock market leadership, despite strong signs that the travel economy is still going strong.

American Airlines (AAL), however, has retaken its 50-day moving average. Up nearly 0.9% to 12.39, AAL is still well below the falling 200-day line. So, no proper buy point is apparent for now. AAL still trades 35% below the left-side high of a potential cup pattern.

The Association of Professional Flight Attendants, representing 26,000 flight staff at American Airlines, has officially submitted a request for release from federal mediation. APFA President Julie Hedrick said in a news release that the union is “ready to strike to get the contract we deserve and have earned.”

Please follow Chung on X/Twitter: @saitochung and @IBD_DChung


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