Dow Jones Fights To Hold Recent Gains; Can These 3 Growth Stocks Lead Next Bull Run?
The Dow Jones industrial average showed resilience, edging a bit higher as traders showed relative calm in stocks today. The Dow rose 0.3% while the Nasdaq composite and the S&P 500 pretty much matched the gain.
Volume is running lower vs. the same time Thursday on both main exchanges.
Meanwhile, highly profitable chicken wings chain Wingstop (WING) is showing newfound relative strength.
Shares rose nearly 5% in heavy volume. The stock also reclaimed its 50-day moving average, a good sign.
Wingstop, however, is still forming a base. This means a proper buy point remains a distance away, at 72.10.
The stock is up 82% year to date.
According to Stock Checkup, Wingstop earns a decent Composite Rating of 89 on a scale of 1 to 99. Watch to see if it improves.
Elsewhere in the stock market today, some chip companies continued to creep higher.
Don’t Forget Tech Stocks
Broadcom (AVGO) is headed for a third up day in a row. The diversified wireless, industrial and computer semiconductor manufacturer and designer rose nearly 0.7% and got as high as 255.91. At that price, Broadcom has gotten to within 6% of 271.81 high in its new base.
The megacap tech has also formed a two-week handle that started on Dec. 14. Add 10 cents to the high of a handle to get the prime buy point.
A handle should show a downward slant along the lows, and Broadcom shows this admirably.
Notice, too, how the relative strength line has been gushing higher.
In fact, the RS line has already hit new high ground ahead of a potential breakout. When a stock market gets an upgrade in the current outlook by IBD to “Market in confirmed uptrend,” high-growth stocks with sound fundamentals, solid industry group relative strength, and a surging relative strength line stand an excellent chance of leading the next inevitable bull run.
Read more about the relative strength line in this Investor’s Corner.
How To Analyze Tesla Stock
Tesla (TSLA) ran more than 4% higher and got as high as 330.96. The stock is still trading below the 50-day moving average, a sign of weakness.
But Tesla’s RS line has been trending higher since October, a positive sign. Plus, shares look poised to end 2018 with a gain, right now up 6%.
The stock still holds a lofty overall gain of 726% since its first-stage breakout from a seven-week base that was a tad deeper than a normal flat base on April 1, 2013. The correct buy point was 40.10, a dime above the base’s left-side high.
Tesla has been showing impressive progress in the ramp up of its mass-produced Model 3. Wall Street seems to agree. Analysts polled by Thomson Reuters expect the Palo Alto, Calif., company to post record earnings of $ 6.88 a share, a humongous turnaround from net losses of $ 5.39 a share in 2015, $ 2.87 in 2016, $ 8.66 in 2017 and $ 1.44 this year.
Please follow David Saito-Chung on Twitter at @IBD_DChung for more on growth stocks, chart analysis, bases and breakouts.
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