ForexProsThe Exchange Rates are powered by Forexpros - The Leading Financial Portal.

Nike, Microsoft Lead 4 Dow Jones Stocks Holding Up In Market Correction

February 11, 2018 | By | Reply More

A stock market correction kicked in last week, as the Dow Jones industrial average, S&P 500 index and Nasdaq composite suffered their worst weekly losses in two years. But Dow Jones stocks Nike (NKE), Microsoft (MSFT), Cisco Systems (CSCO) and JPMorgan Chase (JPM) reclaimed their 50-day moving averages on Friday as the S&P 500 index rebounded from a dive to its 200-day line.

X When a stock market correction is underway, investors should focus on creating watch lists of quality companies. Focus on top-rated companies that are holding up well. During a stock market correction they may form bullish bases. When a new market rally kicks in, they may be among the first to break out.

A good way to spot outperformers in a stock market correction is via the relative strength line. The RS line tracks a stock vs. the S&P 500 index. Look for stocks with rising RS lines at or near new highs.

The 4 Dow Jones stocks — Nike, Microsoft, Cisco and JPMorgan — all have RS lines at or near record highs. The RS line is the blue line in the charts below.


IBD’S TAKE: Here’s how the stock market correction unfolded, and what your investing game plan is now.


Nike

Nike stock rose 4.8% to 65.49 in Friday’s stock market trading, easily retaking the 50-day moving average. Shares are about 4% below their 68.83 peak on Jan. 31.

Nike’s RS line has been rising for the past four months, but it was only on Friday that it hit a 52-week high.

Microsoft

Microsoft stock jumped 3.7% to 88.18 on Friday, closing slightly above the 50-day line. After gradually trending higher from mid-April to late-October, Microsoft’s RS line moved sideways until the second half of January, when it began trending higher. The RS line ended the week just below highs on a daily chart and at a new peak on a weekly chart.

Cisco Systems

Cisco stock climbed 2% on Friday to 39.54, pennies above its 50-day line. After going sideways for several years, the networking giant’s RS has been rising since mid-August, hitting a multi-year high on Friday.

Cisco’s stock has improved as a long turnaround effort to shift from legacy hardware to software and services has started to bear fruit. Cisco earnings are on tap Wednesday.

Fiscal second-quarter revenue should rise 1.9% to $ 11.82 billion, which would be the first year-over-year gain in eight quarters. Earnings per share is expected to climb 3% to 62 cents.

JPMorgan Chase

JPMorgan stock advanced 2% to 110.04 on Friday, modestly retaking the 50-day line. Bank stocks have benefited from rising interest rates, so they were a little insulated from the stock market selling due to rising bond yields. JPMorgan’s RS line has gradually been rising since early June, hitting new highs frequently.

YOU MIGHT BE INTERESTED IN:

The Big Picture: S&P 500 Leads Rebound; Now Watch For This Signal

The Next Move For Traders? Watch For Stock Leaders That Drop Mildly

Top China Internets, IBD 50 Stocks, Hotels Lead Investing Action Plan

This Shock Economic Outlook May Keep Stock Market On Edge


News – Investor’s Business Daily

Tags: , , , , , , ,

Category: Business News

Leave a Reply